The Nikkei India Composite India PMI Output index, a gauge of private sector activity in both manufacturing and services, expanded in February for the first time after demonetisation. The index came in at 50.7, from 49.4 in January. A reading above 50 signifies expansion from the previous month, while one below 50 indicates contraction.
Pollyanna de Lima, an economist at IHS Markit, pointed out that “growth rates were mild at best and far from their historical averages. It is still too early to state that expansion rates will climb to their trend levels in the near term. Companies remain reluctant to take on additional staff, and confidence towards the 12-month outlook for output dipped to its second lowest mark in over one year. These factors indicate that, so far, firms are doubtful about the sustainability of the economic recovery”.