India's manufacturing growth slips to 16-month low in March: HSBC PMI
- Parliament LIVE: Jaitley has promised concrete proposals on GST, says Chidambaram
- Kashmir violence -- Omar Abdullah interview: 'It has been building up to this'
- Baton Rouge shootings: Three officers killed, suspect dead
- Grading writers, artistes is new brainwave of Culture Ministry
- Reforms not because of Cong, in spite of it... credit goes to Rao-Singh: Arun Jaitley
India's manufacturing sector witnessed the slowest rate of growth in 16 months in March as power outages hampered production activity and decline in new business orders, an HSBC survey said today.
The HSBC India Manufacturing Purchasing Managers' Index (PMI) -- a measure of factory production - stood at 52 in March down from 54.2 in February.
Persistent power cuts weighed on the manufacturing sector. Moreover, the volume of incoming new work increased at the slowest pace in 16 months and export orders expanded at the slowest pace in seven months, HSBC said.
Though the index has remained above the 50 mark, below which it indicates contraction, for more than three years now. The PMI reading for March showed that manufacturing operating conditions in the country has improved at slowest rate since November, 2011.
"Manufacturing activity lost momentum in March, with output growth slowing notably on the back of a deceleration in new orders and power outages," HSBC Chief Economist for India & ASEAN Leif Eskesen said.
Last month India's current account deficit hit a record 6.7 per cent of GDP in December quarter to USD 32 billion on account of surge in oil and gold imports, besides weak exports.
Eskesen further noted that output could get a lift in coming months as inventories are replenished. Inventories of finished goods were depleted to meet demand, partly due to the output disruptions caused by power cuts.
Meanwhile, HSBC said even as input as well as output prices increased at a moderate pace during March, the scope for further monetary policy easing remains "limited".
"Encouragingly, input and output price inflation eased. Even so, the scope for further monetary policy easing remains limited," Eskesen said.
The Reserve Bank in its mid-quarter monetary policy review on March 18 reduced the indicative policy rate (repo rate) by 25 basis points from 7.75 to 7.50 per cent. Repo rate is the rate at which banks borrow short-term funds from the central bank.
- Congress opposition to GST does no credit to a party that opened up the economy 25 years ago
- Kashmir poses not just moral but also existential questions involving statecraft
- New FDI policy in food products is unlikely to be a game-changer by itself
- Swathi murder case in Chennai must trigger a move to enact strong witness protection laws
- A new government in Nepal does not hold out any promise of greater stability
- Kashmir is more than land, it is people