The effect of implementation of GST is also seen on the service sector. After the GST came into effect in July, the services sector activity reached a low level in the last four years.

This conclusion has come out in a monthly survey. The Nikkei India Services Purchasing Managers Index (PMI), which assesses the service sector activities on a monthly basis, dropped to 45.9 in July. This figure is lowest since September 2013. A month ago, in June this high of eight months was at 53.1 point. PMI data for the July service sector also show the first drop in this calendar year.

Principal economist of IHS Market Polyana de Lima said in the report, "The PMI data of July shows the decline in activities across India, after the upturn in activities in June, the economy will come back in July."

It has been said in the survey that after the GST is implemented, the service sector companies say that the order of the new work has come down, which has slowed the activities.

After the decline in the manufacturing sector, the services sector also declined in July. In the manufacturing sector, there is a decline in the new orders and the decline in production in July. In addition, the Nikkei India composite PMI output index (which measures both the manufacturing and service sector) dropped rapidly to 46.0 points in July. It was 52.7 points a month ago in June.

Lima says that after notes ban, the private sector's activities have come down so much for the first time. This is the first major fall since 2009, which shows sales activities in the market. Nonetheless, service providers are optimistic about the upcoming 12-month scenario.

According to the Nikkei India Manufacturing PMI report, the highest decline in the manufacturing sector has been seen.

The same, on the other hand, the report said that 12 months' approach to production was positive in July, in which companies were expected to have more clarity about GST so that their growth rate remained.

(Click here for Android APP of IBTN. You can follow us on facebook and Twitter)

Share This News

About sharing