BENGALURU (Reuters) – Activity in India’s dominant service sector contracted at the sharpest rate in nearly four years in July after a new tax policy sowed confusion and sent new orders into free fall, a survey showed on Thursday.
Initial confusion on the national goods and services tax (GST) led July’s Nikkei/IHS Markit composite Purchasing Managers’ Index, which measures both manufacturing and services activity, to sink to 46.0 – its lowest reading since March 2009 – from June’s eight-month high of 52.7.
The PMI for India’s dominant service industry dropped to a near four-year low of 45.9 in July from 53.1. June’s reading had been the highest since Prime Minister Narendra Modi banned high-value currency notes in November.
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