Mumbai: India’s main services index signaled a contraction in the industry for the first time in more than a year, a worrying sign for an economy that’s already slowing sharply.
The Markit India Services PMI declined to 49.6 last month, dropping below 50 for the first time since May 2018, according to data from IHS Markit. A reading under 50 indicates a contraction in an industry that accounts for more than half of the nation’s gross domestic product.
India lost its status as the fastest-growing major economy after growth slowed to a five-year low of 5.8% in the first three months of the year. Manufacturing is also weakening, a separate PMI survey showed earlier this week, which together with other high frequency data, such as auto sales, suggest the slowdown persisted in the April-June period.
The central bank has already done its bit to bolster growth by lowering its benchmark interest rate three times this year to a nine-year low of 5.75%. Finance Minister Nirmala Sitharaman is expected to announce further measures to support growth when she gives her maiden budget on July 5. – Bloomberg
The next general election is due in 2024. Time to roll up the sleeves and get down to work on the economy. The time for PR and spin is long past. Some good people of global stature should be brought in to strengthen the economic team.