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Services PMI crash foreshadows a painful year for India’s economy

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At an abysmally low 5.4, the Purchasing Managers’ Index (PMI) for services in April has dealt a severe blow to the sector. Note that a reading below 50 shows contraction.

Services PMI was 49.3 in March and 57.5 in February. True, a low number was expected, considering that services by nature require physical engagement.

This was severely constrained due to the lockdown, which had shuttered most services except the essential ones such as banking and postal departments.

Transportation, too, was restricted to ferrying of only essential goods. Considering that services contribute more than 50% to India’s gross domestic product (GDP), the blow to economic growth is expected to be severe. “The slowdown in PMI validates our view of a sharp

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