India’s services sector growth dropped to 6-month low in October due to lower work from western developed economies as the HSBC Compiled Purchasing Managers’ Index for the services sector, based on a survey of around 400 companies, dropped to 53.8 in October compared to 55.8 in September. Any reading higher than 50 indicates growth in the respective sector.
India’s service sector PMI index has been held above the 50-mark since November last year in spite of current dismal global outlook and lower domestic GDP growth. India’s service sector has nearly 2/3rd weight on the overall economic activity and growth in Service sector will have positive impact on the GDP numbers. India’s GDP growth stood at 5.5% in the last quarter and in spite of lower GDP growth, RBI has kept the interest rates unchanged due to 10-month high inflation of 7.8% in September.