India needs to work both on manufacturing and services. The focus should be more on manufacturing. According to the previous news on manufacturing, NITI Aayog Vice Chairman Arvind Panagariya said, “India needs to work on both manufacturing sector leg and services sector leg…Manufacturing leg is more important because it creates more jobs,” while addressing the 4th National Standards Conclave. But according to a survey showed on Thursday, Manufacturing Sector growth in the country moderated to a three-month low in May.
Reserve bank may get muted inflationary pressure to adopt an accommodative policy stance.
An indicator of manufacturing activity declined from 52.5 in April to a three-month low of 51.6 in May.
For the fifth consecutive month the Indian manufacturing sector, therefore, stayed in expansion mode in the month of May. A reading above 50 indicates expansion, while any score below the mark means contraction.
Pollyanna De Lima, Economist at IHS Markit and author of the report said, “The upturn in the Indian manufacturing sector took a step back in May, with softer demand causing slower expansions in output and the amount of new work received by firms.” She also added that there was also a renewed decline in new export orders.
There were “softer expansions” in both new orders and production during the month of May. Since February, incoming new work rose at the weakest pace with slowdowns evident in the consumer and intermediate goods categories. The capital goods producers also recorded a contraction in order books.
On price rise, the survey said that the rate of inflation softened to the slowest in eight months.