Service Sector : Lowest growth since April 2009

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Shivani
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Service Sector : Lowest growth since April 2009

#1 Postby Shivani » Mon Aug 05, 2013 1:00 pm

Since April 2009, the growth of the service sector has touched the lowest level this year..That index fell to 47.8 in July, its first sub-50 reading since April 2009, from 51.9 in the previous month.India’s private sector activity contracted for the first time in over four years in July the reasons for this could be falling of new businesses and a difficult economic climate. The service sector accounts for nearly 60 percent of an economy that grew at a decade low of 5 percent in the last fiscal year.

Manufacturing and services companies both signalled lower volumes of incoming new work, with a faster rate of contraction in services.Although on the issue of price rise, the survey said inflation has not reached to that high level amid of weaker demand and tough competition.The Indian economy is struggling with low growth, a record high current account deficit and a weakening currency. The national elections in India are also due by May next year, there are concerns over whether Prime Minister Manmohan Singh's government can find the strength to push through needed reforms.

The central bank took on various steps to strengthen the currency and to take it to some high levels..but their efforts resulted in just squeezed liquidity and increased short term interest rates.

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