Services sector activities contract sharply in May; firms cut jobs: Survey
New Delhi: India's service sector activities declined sharply in May as the coronavirus pandemic continued to impair business operations, restrict consumer footfall at shops and resulted in job losses, a monthly survey said on Wednesday.
Reflecting a fall in output at an "extreme rate once again", the IHS Markit India Services Business Activity Index stood at 12.6 in May.
Although the headline figure rose from April's unprecedented low of 5.4, the score remained at a level, which prior to the coronavirus pandemic was unparalleled in over 14 years of data collection and pointed to an extreme drop in services activity across India, the survey noted.
A print above 50 means expansion and a score below that denotes contraction, as per the IHS Markit India Services Purchasing Managers' Index (PMI).
According to the survey, output sank sharply due to extended business shutdowns and very weak demand conditions.
"Service sector activity in India is still effectively on hold, latest PMI data suggest, as output fell at an extreme rate once again during May," Joe Hayes, Economist at IHS Markit said.
Hayes noted that demand for services, both domestically and overseas, continued to plummet in May as clients' businesses remained closed and footfall was drastically below normal levels.
Employment continued to fall in response to weak demand and expectations of further challenging conditions, the survey said.
The Composite PMI Output Index, which measures combined services and manufacturing output, also signalled a severe contraction in private sector business activity in May.
The score, which was at 14.8 compared to 7.2 in April, was consistent with a decline in output which was unparalleled prior to the COVID-19 outbreak, the survey said.
Hayes said that with economic output set to fall enormously in the first half of 2020, it is clear that the recovery to pre-COVID-19 levels of gross domestic product (GDP) is going to be very slow.
India was already in the midst of a protracted economic slowdown before the virus hit due to a festering crisis among shadow lenders and declining consumer demand and private investment. Its GDP grew by 4.2 per cent in 2019-20, the slowest pace in 11 years.
On Monday, Moody's Investors Service downgraded India to the lowest investment grade level and kept it on negative watch, largely because the country faces a prolonged period of slower growth relative to its potential and rising debt levels.
Moody's Investors Service, S&P Global Ratings and Fitch Ratings are predicting the first contraction in GDP for India in over four decades and a fiscal deficit blowout following COVID-19 disruptions.
Meanwhile, on Tuesday, Prime Minister Narendra Modi asserted that India will tide over the coronavirus pandemic and will get back on track with the government's decisive policies.
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Om Birla attends swearing-in of new B'desh PM, says India stands ready to support BNP govt
New Delhi (PTI): Lok Sabha Speaker Om Birla on Tuesday attended the swearing-in ceremony of new Bangladesh Prime Minister Tarique Rahman in Dhaka, and said India stands ready to support Bangladesh's endeavours to build a democratic, progressive and inclusive nation.
Separately, the speaker called on the new Bangladesh prime minister and conveyed the wishes of Prime Minister Narendra Modi.
He also handed over an invitation from Prime Minister Modi to Rahman to visit India, officials said here.
“Glad to attend the swearing-in ceremony of the new government of Bangladesh led by Prime Minister Tarique Rahman in Dhaka today. India stands ready to support Bangladesh’s endeavours to build a democratic, progressive and inclusive nation,” Birla posted on X.
Bangladesh High Commissioner to India, Riaz Hamidullah, said in a post on X, “Prime Minister Tarique Rahman conveys his greetings to India and PM Narendra Modi to the visiting India Lok Sabha Speaker Om Birla at a courtesy meet following the swearing-in of the new government.
“Speaker Birla conveyed wishes and an invitation to India. Both leaders expressed optimism to work together for the well-being of the people of Bangladesh and India, pursuing a people-centric menu of cooperation.”
Birla also met Maldives President Mohamed Muizzu, Bhutan Prime Minister Tshering Tobgay and other leaders on the sidelines of the event.
Led by Rahman, the Bangladesh Nationalist Party (BNP) swept to power with a two-thirds majority with 49.97 per cent votes and 209 seats in the polls held on February 12, results for which were declared on February 13.
The Jamaat-e-Islami, which was opposed to Bangladesh's independence from Pakistan in 1971, registered its best-ever performance with 31.76 per cent votes and 68 seats.
The National Citizen Party (NCP) secured the third-highest number of seats, six, and 3.05 per cent votes.
Bangladesh had invited Narendra Modi to the ceremony, but the prime minister could not attend the event as he was scheduled to hold talks with French President Emmanuel Macron in Mumbai on Tuesday.
On reaching Dhaka, Birla said the swearing-in of Rahman was an important moment that would strengthen people-to-people relations and shared democratic values between the two neighbours.
“Honoured to be in Dhaka representing India at the swearing-in ceremony of the new government led by Tarique Rahman as the prime minister. It's an important moment that will strengthen people-to-people ties and shared democratic values between our two nations,” Birla said.
Birla was accompanied by Foreign Secretary Vikram Misri and other officials.
