Activity in India's services sector contracted for the second straight month in June as new orders declined for the first time in 14 months while inflation rates softened,.
The Nikkei's Purchasing Managers' Index (PMI) or services slumped further to 47.7 points in June rom 49.6 the previous month. The index had fallen under the 50-point mark that separates growth from contraction in May for the first time in 13 months.
The manufacturing PMI released on Wednesday, too, showed a slowdown in activity in the sector in June on easing of new business orders.
While the latest PMI numbers are disappointing, the business outlook is more in line with the view that the economy is on course for a revival. On Thursday, Reserve Bank of India Governor Raghuram Rajan backed this view and said he saw capital investment picking up.
The services sector contributes 51% to the Indian economy. It expanded 10.1% in 2014-15, the first double-digit growth in the 2011-12 series.
The Composite PMI Output Index, which takes into account activity in both manufacturing and services, also fell below the 50-mark -the first contraction since April 2014.
The services PMI report, based on a survey of 350 private sector firms, suggested that business activity fell in five of the six monitored categories, except for hotels & restaurants.
The Nikkei's Purchasing Managers' Index (PMI) or services slumped further to 47.7 points in June rom 49.6 the previous month. The index had fallen under the 50-point mark that separates growth from contraction in May for the first time in 13 months.
The manufacturing PMI released on Wednesday, too, showed a slowdown in activity in the sector in June on easing of new business orders.
While the latest PMI numbers are disappointing, the business outlook is more in line with the view that the economy is on course for a revival. On Thursday, Reserve Bank of India Governor Raghuram Rajan backed this view and said he saw capital investment picking up.
The services sector contributes 51% to the Indian economy. It expanded 10.1% in 2014-15, the first double-digit growth in the 2011-12 series.
The Composite PMI Output Index, which takes into account activity in both manufacturing and services, also fell below the 50-mark -the first contraction since April 2014.
The services PMI report, based on a survey of 350 private sector firms, suggested that business activity fell in five of the six monitored categories, except for hotels & restaurants.
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