As shown by a private survey conducted on Monday, as tighter restrictions to contain a resurgence of the coronavirus cases have hammered a demand along with forcing the firms to shed jobs at a rapid clip, the activity in India’s dominant service sectors contracted sharply in June. Taking the total number of infections to around 30.5 million, a daily count of over 40,000 coronavirus cases are been reported by Asia’s third-largest economy which has already witnessed more than 4,00,000 COVID-19 deaths till now.
From an already depressed 46.4 in May, IHS Markit’s Service Purchasing Managers index plunged to 41.2 in the previous month. With being well below the 50 levels separating growth from contraction that was its lowest reading since July 2020.
Making the sub-index to its lowest since July 2020, muted demand sank the new business. With the fastest reduction rate recorded in June firms shed headcount for a seventeenth straight month as a result and Showing the possibility of the job crisis that may get worse in over the coming year a Reuters poll was taken around a month ago.
Underscored by a sister survey which was conducted on Thursday, the depressed service sector results are seen in line with the overall downturn in their business activities, it also showed that the manufacturing activity contracted for almost a year in June for the first time.
Reaching a six month high, India’s retail inflation rose above 6% in May. That said, tightening monetary policies for this fiscal year is not expected by the Reserve Bank of India as it looks to support economic growth.
