Service sector grows modestly in February as Covid-19 cases decline
Service sector in India picks up pace marginally. Find factors behind its growth and those affecting it adversely.
Service sector grows modestly in February.
IHS Markit India Services Business Activity Index stands at 51.5 in January. However, it rises to 51.8 in February.
Similarly, the monthly survey that shows the country’s manufacturing PMI suggests that manufacturing is expanding too due to favourable demand conditions.
Factors as the service sector grows modestly:
Behind the growth of the service sector in India, the decline in COVID-19 cases is one of the major reasons.
Service sector is contact intensive sector and with the rise of COVID -19, it is affected the most due to COVID-19 protocols and norms.
As a result, demand is picking up pace too. It is boosting the growth of service sector. The growth is relatively better on month on month basis.
Factors dampening the growth of the sector:
Despite the dissipation of COVID-19, pandemic related uncertainty continues to have pressure.
Moreover, inflationary pressures are high too.
Further, there is an input shortage. Additionally, there were local elections in 5 states which affected the growth, as says Pollyanna De Lima, Economics Associated Director at IHS Markit.
Lastly, the base standards are higher. This, as a result the rate of expansion turns out to be the second lowest since July, 2021.
