India's manufacturing growth drops to 50-month low in May PMI reading at 50.1

India's manufacturing output dropped for the first time in May since March, 2009, as per the PMI reading published by HSBC. The HSBC compiled purchasing managers- index (PMI), an effective indicator to judge the performance of the sector, dropped to 50.1 in May compared to 51 in April. Any reading higher than 50 indicates growth and PMI reading of 50.1 indicates almost zero growth. This is the lowest PMI reading in last 4 years.

This PMI reading of manufacturing activity raises fresh concern about India-s industrial growth and economic growth. India-s GDP growth for previous financial year dropped to decade low of 5% while its manufacturing sector grew by just 2.6% in the last quarter. RBI needs to cut rates immediately to boost both industrial and economic growth now.