Nov services activity rises, but at slower pace: Survey

India's services sector activity expanded in November though at the slowest pace in a year, prompting businesses to maintain a positive outlook for the next 12 months. However, concerns about inflation are still high on their minds, a private survey showed.

- Rituraj Baruah & Gireesh Chandra Prasad

S&P Global said on Tuesday that its India Services Purchasing Managers' Index (PMI) fell to 56.9 in November from 58.4 in October. A reading above 50 shows an expansion, while that below 50 shows a contraction.

The survey of 400 service sector businesses covers sectors such as transport, information, communication, finance, insurance, real estate, and business services.

Experts pointed out that although growth moderated in November, some segments that have cooled should pick up in the coming months, lifting the overall growth of the sector.

While "electricity, gas, water supply and other utility services" and construction had seen double-digit growth in the September quarter, trade, hotels, transport, communication and services related to broadcasting had seen a moderation in the July-September period, as per GDP data released on 30 November.

This segment is expected to pick up in coming months, said D.K. Srivastava, chief policy adviser, EY India, adding a GDP growth of 6% in the third quarter as forecast by the Reserve Bank of India seems realistic.

"In the whole year, the economy is expected to grow at 6.5% (as projected by RBI) or cross it by a small margin," Srivastava said. In the second quarter, India's economy had grown at 7.6%.