Skip to main content

Services Activity Contracts for First Time in 3 Months in May

By
 Services Activity Contracts for First Time in 3 Months in May
Services activity contracted for the first time in three months in May even as business optimism touched the highest in over three years. The Nikkei-IHS Markit Services Purchasing Managers’ Index declined to 49.6 in May from 51.4 in April. India’s services activity contracted for the first time in three months in May due to stagnation in new orders even as business optimism touched the highest in over three years, a private survey showed.
The Nikkei-IHS Markit Services Purchasing Managers’ Index declined to 49.6 in May from 51.4 in April. A reading below 50 on this surveybased index shows contraction.“The performance of the service sector was disappointing in May, as output dipped into contraction for the first time in three months,” said Aashna Dodhia, economist at IHS Markit and author of the report. Manufacturing PMI released by the agency last week had shown a decline in factory activity with the index dropping to 51.2 in May from 51.6 in April.

The seasonally adjusted composite PMI Output Index fell from 51.9 in April to 50.4 in May as modest manufacturing sector growth outweighed the marginal decline in services. The services sector has about 60% weight in the Indian economy. India saw the slowest improvement in the health of the overall economy since February in May, the survey said. The outlook at the start of the new fiscal is in sharp contrast with upbeat official numbers at the end of the last fiscal.

Data released last week showed the Indian economy expanded at its fastest pace in seven quarters at 7.7% in the January-March period. Overall, the economy grew 6.7% in FY18 and is forecast to further gather pace to 7.4% in FY19. Rising crude prices and inflation, a depreciating rupee and potentially higher interest rates have emerged as headwinds. The Reserve Bank of India’s monetary policy is expected to change its stance to a hawkish one in the monetary policy review on Wednesday.

Despite rising macroeconomic concerns, businesses were confident of the economy doing better in the current fiscal. “A bright spot of the services PMI data was that business sentiment was the strongest since January 2015, rooted in expectations of improvements in demand conditions in the year ahead,” Dodhia said. The new business sub-index declined to 50.2 in May from 51.4 in April and the lesser demand resulted in jobs growth slowing to the weakest since last December. Input cost inflation picked up from April’s recent low and was solid overall, the survey said, but service providers could not fully pass on higher cost burdens to clients, impinging profit margins. Jobs growth was modest but evident across all monitored broad sectors, with the sharpest increase in information and communications.

The Economic Times, New Delhi, 06th June 2018

Comments

Post a Comment

Popular posts from this blog

New income tax slab and rates for new tax regime FY 2023-24 (AY 2024-25) announced in Budget 2023

By
  Basic exemption limit has been hiked to Rs.3 lakh from Rs 2.5 currently under the new income tax regime in Budget 2023. Further, the income tax slabs in the new tax regime has been changed. According to the announcement, 5 income tax slabs will be there in FY 2023-24, from 6 income tax slabs currently. A rebate under Section 87A has been enhanced under the new tax regime; from the current income level of Rs.5 lakh to Rs.7 lakh. Thus, individuals opting for the new income tax regime and having an income up to Rs.7 lakh will not pay any taxes   The income tax slabs under the new income tax regime will now be as follows: Rs 0 to Rs 3 lakh - 0% tax rate Rs 3 lakh to 6 lakh - 5% Rs 6 lakh to 9 lakh - 10% Rs 9 lakh to Rs 12 lakh - 15% Rs 12 lakh to Rs 15 lakh - 20% Above Rs 15 lakh - 30%   The revised Income tax slabs under new tax regime for FY 2023-24 (AY 2024-25)   Income tax slabs under new tax regime Income tax rates under new tax regime O to Rs 3 lakh 0 Rs 3 lakh to Rs 6 lakh 5% Rs 6
Post a Comment
Read more

Jaitley plans to cut MSME tax rate to 25%

By
Income tax for companies with annual turnover up to ?50 crore has been reduced to 25% from 30% in order to make Micro, Small and Medium Enterprises (MSME) companies more viable and also to encourage firms to migrate to a company format. This move will benefit 96% or 6.67 lakh of the 6.94 lakh companies filing returns of lower taxation and make MSME sector more competitive as compared with large companies. However, bigger firms have shown their disappointment since the proposal for reducing tax rates was to make Indian firms competitive globally and it is the large firms that are competing globally. The Finance Minister foregone revenue estimate of Rs 7,200 crore per annum for this for this measure. Besides, the Finance Minister refrained from removing or reducing Minimum Alternate Tax (MAT), a popular demand from India Inc., but provided a higher period of 15 years for carry forward of future credit claims, instead of the existing 10-year period. “It is not practical to rem
1 comment
Read more

Don't forget to verify your income tax return in August: Here's the process

By
  An ITR return needs to be verified within 120 days of filing of tax return. Now that you have filed your income tax return, remember to verify it because your return filing process is not complete unless you do so. The CBDT has reduced the time limit of ITR verification to 30 days (from 120 days) from the date of return submission. The new rule is applicable for the returns filed online on or after 1st August 2022. E-verification is the most convenient and instant method for verifying your ITR. However, if you prefer not to e-verify, you have the option to verify it by sending a physical copy of the ITR-V. Taxpayers who filed returns by July 31, 2023 but forget to verify their tax returns, will get the following email from the tax department, as per ClearTax. If your ITR is not verified within 30 days of e-filing, it will be considered invalid, and may be liable to pay a Late Fee. Aadhaar OTP | EVC through bank account | EVC through Demat account | Sending duly signed ITR-V through s
Post a Comment
Read more