India’s manufacturing growth slows down in April

The Dollar Business Bureau

A business survey on Monday revealed that due to weak demand, the growth of India’s manufacturing sector slowed down to a 4-month low in April. 

This has raised the demand for a cut in the interest rates by Reserve Bank (RBI) in the coming months, the survey said.

In April, the Markit PMI (Purchasing Managers’ Index) fell to 50.5 from 52.4 in previous month, closing to the 50 mark that segregates the growth from shrinkage and the year’s lowest reading.

The survey pointed out that manufacturers in India have increased their output at a slow pace in the month of April as inflows of new business were mostly unchanged all through the month. The growth in new orders of exports was constant; however, the growth rate was at a 6-month low. 

Pollyanna De Lima, a market economist said that the PMI data has revealed a slowdown in the expansion of output in April, as there is a halt in growth.

The firms had been forced to reduce the output as the growth rate in both domestic and foreign market has declined.

When the retail inflation in March hit a six-month low, Raghuram Rajan, Governor of RBI assured that the monetary policy would remain indulgent. 

The repo rate was brought down to 6.5 percent, a cut of 25 basis points, in April and it also increased the reverse repo rate to assure the cash availability in the banking system.