Manufacturing sector activity rebounded in January and registered positive growth after contracting in December due to demonetisation, according to a private monthly survey.
The Nikkei India Manufacturing Purchasing Managers’ Index (PMI) rose to 50.4 in January from 49.6 in December.
“The main factors contributing to the above-50 PMI reading were growth of both new orders and output,” said Nikkei in a statement, adding that the rates of expansion were only slight, but reversed the contractions noted in December.
A reading above 50 on the index denotes expansion while that below the mark indicates contraction.
“Improving confidence among firms bodes well for the outlook, with the expansion in manufacturing output likely to pick up pace in the coming months,” said Pollyanna De Lima, Economist at IHS Markit and author of the report.
IHS Markit has forecast a 6.9 per cent rise in GDP for the current fiscal and economic growth is expected to accelerate to 7.4 per cent next fiscal.