PMI services drops to 3-month low in November as GST cools demand

Rising input costs likely to deter RBI from effecting any rate cut tomorrow

Services, the biggest sector of the Indian economy, contracted in November because of the goods and service tax affecting demand, shows the widely-tracked Nikkei purchasing managers’ index (PMI).

The PMI fell to 48.5 points in November from 51.7 in the previous month. The November reading is the lowest since August. A reading above 50 points denotes expansion and one below that is contraction. 

This implies that the country’s growth story will take time to pick up significantly after economic expansion did rise to 6.3 per cent in the second quarter from 5.7 per cent in the first one.

Even then,