New Delhi: India’s services sector expanded in August but at a slower rate compared with July, according to a private survey of 400 businesses engaged in consumer, transport, information, communication, finance, insurance, real estate and business services.
The IHS Markit India services business activity index retreated from 53.8 in July to 52.4 in August, signalling a slower rate of output growth, the market information supplier said in a statement on Wednesday. A figure above 50 indicates expansion and below that indicates contraction.
The survey collects data from businesses in the second half of every month. The survey also pointed out that all the sectors it covered, except real estate and business services, showed sustained growth. Services account for more than half of India’s $2.7 trillion economy and is a big job creator.
Earlier in the week, IHS Markit survey had showed India’s manufacturing output in August grew at the slowest pace in 15 months. News of slower growth in services sector follows data earlier this month showing eight infrastructure industries that account for two-fifths of the index of industrial production (IIP) slowed to a 2.1% expansion in July, down from a 7.3% growth in the year-ago period.
The government has in recent weeks announced some steps to arrest the economic slowdown, including enhancing access to credit for small businesses. The government is now examining the possibility of a reduction in goods and services tax (GST) rate on automobiles to help the industry tide over the demand slowdown.