India Services Growth Quickens to a Seven-Month High, PMI Shows
Indian services grew at the fastest pace in seven months in September, a private survey showed, as the government steps up efforts to revive economic expansion.
The purchasing managers’ index rose to 55.8 from 55 in August, HSBC Holdings Plc and Markit Economics said in a statement today. A number above 50 indicates growth.
Prime Minister Manmohan Singh’s administration last month raised diesel prices to pare fuel subsidies and opened India to more foreign investment, snapping two years of policy paralysis to fight the slowest economic growth since 2009. The cabinet today is due to consider proposals to lift caps on overseas investment in the insurance and pension industries.
“The measures are positive,” Shubhada Rao, chief economist at Yes Bank Ltd. in Mumbai, said before the data. “Sentiment has improved but results will be seen only by the end of the year.”
The rupee has surged 6.6 percent against the dollar since Sept. 13, the day the government started unveiling the changes. It strengthened 0.3 percent to 51.9888 per dollar as of 10:35 a.m. in Mumbai. The BSE India Sensitive Index (SENSEX) advanced 0.9 percent. The yield on the 10-year bonds due June 2022 was at 8.14 percent from 8.15 percent yesterday.
Singh permitted more investment in the retail, aviation, energy and broadcast industries last month. He is also seeking to speed up road, rail, port and power projects to ease bottlenecks that have stoked price pressures.
Reserve Bank of India Governor Duvvuri Subbarao said yesterday the central bank expects a moderation in inflation, which has exceeded 7 percent for most of this year. Subbarao has left interest rates unchanged since a reduction in April to 8 percent from 8.5 percent, the first cut since 2009.
The Indian economy will expand 5.6 percent in the year through March 2013, the weakest pace in a decade, according to forecasts released yesterday by the Asian Development Bank.
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