Services Sector Activity in July at 21-Month High

Buoyed by higher demand and new business orders, India’s services sector activity expanded to hit a 21-month high in July.

The Nikkei India Services Business Activity Index rose to 54.2 from 52.6 in June.

A reading of over 50 on this survey-based index indicates expansion and below that means contraction. Manufacturing purchasing managers’ index released earlier showed a marginal decline in July to 52.3 from 53.1 in the previous month, but underlying momentum remained strong.

The Composite PMI Output Index, which comprises both services and manufacturing, rose to 54.1 in July from 53.3 in June.

The services activity index is based on a survey conducted among purchasing executives of more than 400 services providers divided into six categories: consumer services, transport & storage, information & communication, financial & insurance, real estate and business services.

Companies hired at their fastest pace since April as demand improved. Panellists cited higher output requirements as the key factor behind job creation.

Jobs growth was evident across all broad sub-sectors. Business confidence regarding the 12-month outlook also picked up from the low recorded in June.

The survey highlighted “some warning signs” that could lead to further monetary tightening.

An uncertain global climate, currency weakness and strong inflation may continue to place pressure on the central bank to hike interest rates over the coming months. RBI had raised key interest rates on Wednesday by 25 basis points, its second tightening after the previous policy announcement in June.

Google Accepts Blame for UIDAI Helpline Number mystery

Google has admitted that it is to blame for the mysterious appearance of an outdated Aadhaar helpline number in the contact lists of phones, and clarified that it wasn’t an unauthorised breach of the Android devices. The US Internet major added that the issue would be fixed over the next few weeks.

“Our internal review has revealed that in 2014, the then UIDAI helpline number and the 112 distress helpline number were inadvertently coded into the SetUp wizard of the Android release given to OEMs for use in India and has remained there since. Since the numbers get listed on a user’s contact list these get transferred accordingly to the contacts on any new device,” a Google spokesperson said in a statement late Friday.

“We are sorry for any concern that this might have caused, and would like to assure everyone that this is not a situation of an unauthorised access of their Android devices,” the company added.

It said that users can manually delete the number from their devices.

“We will work towards fixing this in an upcoming release of SetUp wizard which will be made available to OEMs over the next few weeks,” Google said.

Earlier in the day, the Unique Identification Authority of India, telecom operators and handset vendors said they had no role in the mysterious appearance of the Aadhaar helpline number.

They were responding to a social media storm on Friday over the appearance of defunct UIDAI helpline number 1800-300-1947 on Android and some iOS devices, with many citizens fearing a breach of privacy amid the ongoing debate around the security of the Aadhaar system.

UIDAI, which manages the country’s Aadhaar project, said in a statement that it has not asked handset makers and telecom service providers to include its tollfree number on mobile phones. It clarified that the number that showed up in the contact lists of some phones was an outdated and invalid helpline number.

Some vested interests are trying to create unwarranted confusion, UIDAI had said.

Telecom operators denied any role in the matter. The inclusion of a certain unknown number in the phonebooks of various mobile handsets “is not from any telecom service provider,” the Cellular Operators Association of India said in a statement.

Below normal rain for rest of season

An evolving El Nino in the Pacific Ocean will impact the rest of the monsoon in the country.

The rainfall for the August to September season could be below normal, 95% of the Long Period Average with a model error of plus or minus 8%, the India Meteorological Department indicated in a forecast.

Tercile probabilities in the forecast for the same period indicated a 47% probability for below normal rainfall, and 41% probability of normal rainfall. The probability of an above normal rainfall was just 12%.

Rainfall over 106% of the LPA is above normal, less than 94% is below normal and between the range of 94-106% for the August to September period is normal.

A senior met department official said that a warming trend has been noticed in the sea surface temperatures of the Pacific Ocean. Such warming is an indicator of the development of El Nino in the latter part of the season.

“The warming in the sea surface temperatures can induce some changes in the atmosphere which may affect the second half of the monsoon,” the official added.

Meteorologist and all-India Internet Weather Radio Station founder J R Kulkarni said, “ Normal and above normal probabilities in the tercile forecasts add up to 53%, so there is more probability of normal rain during the second half.”

IMD additional director general M Mohapatra said the probability of above-normal rain in the second half of the season has been ruled out.

“The probability of below normal rain in the second half of the season is 47% and that of normal rain is 41%. There is little difference between the two forecast probabilities. So, the latter part of the monsoon season could have either normal or below normal rain,” he said.

The forecast said mid-season rainfall over the country till July end suggested that distribution of rainfall is “very good over of the country except Bihar, Jharkhand and northeastern states.”

Rainfall during August is likely to be 96% of LPA, plus or minus 9%, and higher than the 94% forecast in May.

Meanwhile, there are now eight deficient districts with below normal rain. These include Aurangabad, Nandurbar, Jalna, Buldana, Sangli, Beed, Solapur and Dhule.

Indigo is 12

July Services PMI records strong growth

India’s services sector activity remained in the growth territory for the second consecutive month in July, as business activity witnessed the strongest growth since October 2016 amid improved demand conditions. The seasonally adjusted Nikkei India Services Business Activity Index rose from 52.6 in June to 54.2 in July, as new businesses rose at the fastest rise since June 2017.

In PMI parlance, a print above 50 means expansion, while a score below that denotes contraction.

Amid reports of improved demand conditions, business confidence towards the 12-month outlook picked up from June’s recent low. Subsequently, firms raised their staffing levels at the strongest pace since April. Meanwhile, the headline seasonally adjusted Nikkei India Composite PMI Output Index, that maps both the manufacturing and services sector, rose from 53.3 in June to 54.1 in July.

On the prices front, inflationary pressures remained marked during July.

The six-member Monetary Policy Committee headed by RBI Governor Urjit Patel for the second time in two-month raised interest rate by 0.25 per cent on inflationary concerns.

Pune Metro III snippets

The work on the elevated Hinjewadi-Shivajinagar Metro corridor will begin by October.

The project’s executing authority, the Pune Metropolitan Regional Development Authority, has announced the final bidder for the proposed project after a four-month wait — Tata Reality Infra Pvt Ltd and Siemens Project Ventures Joint Venture.

The project, set to cost Rs.8,313 crore, is aimed at addressing the traffic woes faced by the nearly 2 lakh IT professionals who work at the Rajiv Gandhi Infotech Park in Hinjewadi.

This will also be the first project in the country implemented under the Metro policy of 2017, which aims to lessen the financial burden on the Centre.

Gitte admitted they found it tough to find bidders under the new policy. The central government has allocated Rs.1,200 crore, while the state will provide Rs.800 crore in the form of land banks. The remaining has to be generated by the bidder by monetizing the land banks. Just as with the Public-Private Partnership (model), the Centre and the state will account for 20% each of the project cost.

“Now, the bid proposal will be tabled before the PMRDA general body before it is submitted to the state finance department. Once that is cleared, it will be submitted to the central government’s Empowered Committee to receive the 20 per cent VGF grant. The bidder will sign a contract with the Centre to execute the project on a Design, Build, Finance, Operate and Transfer model,” Gitte added.

He further said that this will be the first such project in India. The other Metros — Hyderabad, Mumbai, and Delhi — run on the PPP basis.

The state government has already provided 50 hectares for the car shed, 5.6 hectares in Balewadi for the land bank. It plans to allocate additional land banks to help fund the project.

Guardian minister Bapat said this project will go a long way in making life easier for commuters from the IT sector, ease traffic in Hinjewadi and also create jobs. “We are also planning parking bays at the stations, enabling commuters to park their vehicles before taking the Metro,” Bapat added.

He assured to make sure the project is executed at the earliest and that all necessary clearances are given. “Once the bid approval and concession agreement process is completed, the work will immediately commence,” Bapat said.

Investment Potential Index

Delhi has topped the state investment potential index list, followed by Tamil Nadu.

The index prepared by economic think tank National Council of Applied Economic Research, showed that Delhi topped the rankings on infrastructure and economic conditions of the state. NCAER launched the index in March 2016 to provide metrics of economic governance, competitiveness and growth opportunities at the state and regional levels. The index is designed to provide a systematic and reliable “go-to” reference for policymakers, existing businesses, and potential domestic and overseas investors.

Tamil Nadu was in second place and topped the rankings in labour and governance. Compared to 2017 rankings, West Bengal, Tamil Nadu and Punjab have made the most rapid gains in 2018, moving up by 11, 4 and 4 spots respectively to 10th, 2nd, and 12th positions.

The index ranks competitiveness of states on six pillars: land, labour, infrastructure, economic climate, political stability & governance, and business perceptions.

These six pillars are classified under four broad categories: Factor-driven (land & labour), efficiency-driven (infrastructure), growth-driven (economic climate and political stability & governance), and perceptions-driven (ranking of business climate built on firm surveys).

Although Assam, Jharkhand and Bihar are ranked among the least favourable states for investment, they are ranked higher under individual pillars.