After goods and services tax (GST) collections and manufacturing, the purchasing managers’ index (PMI)
of the dominating sector of the economy — services — also indicated slow economic revival.
The Nikkei PMI rose for the second straight month to 51.4 in April, up from 50.3 in March. Services had contracted in February, going below 50 points. The April data suggests business activity is rising at a faster pace, supported by new order growth. It also
noted that job creation accelerated at the sharpest pace since March 2011.
On Tuesday, government data showed that GST collections crossed the Rs 1 trillion-mark in April. This had prompted Finance Minister Arun Jaitley to say that the collections reflect an upswing in the economy as indicated by other reports. PMI for manufacturing also rose to 51.6 points in April from 51 in March.
So far, only GST and PMI for manufacturing and services numbers have come in for April, which somewhat corroborate what Jaitley had said.
However, a definite trend will have to be watched for a few more months, besides PMI for services, to gauge any firm economic revival. Also, PMI for manufacturing in April was not as high as in February. The GST numbers were also a bit of an exception in April.
The index of industrial production (IIP) data that will come on May 12 will be for March. Also, GDP data, slated to be released this month-end, will also be for the previous financial year.
“It was encouraging to see the Indian service economy report a positive start in the April quarter, with output growth gaining momentum as demand conditions improve. Subsequently, the best round of job creation since March 2011 was registered within the sector,” said Aashna Dodhia, economist at IHS Markit, and author of the report.