According to the survey organized by Nikkei Purchasing Managers’ Index (PMI), a private firm reported that the manufacturing activity fell down in the month of October but the companies hired a large number of workers to provide greater services to the users in respect of outstanding business. The survey revealed that due to the negative effects after the implementation of Goods and Services Tax (GST), significantly hampering the new business orders.
According to PMI, it has shown that manufacturers activities came down from 51.2 in September to 50.3 in the month of October. The survey said that after expansion in previous two months- manufacturing shrinkage at 49.9 in the month of October. After expanding for the previous two months, the New Business Orders Index slipped into the contraction zone at 49.9 in October.
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While Commenting on the survey data conducted by Indian Manufacturing PMI, Aashna Dodhia, an economist at IHS Markit, said, “India’s manufacturing companies struggled somewhat as the recent recovery enjoyed by the sector lost impetus in October. Disappointingly, manufacturing production rose at the weakest pace in the current sequence of growth. Inflows of new orders stagnated as the negative effects arising from the implementation of GST continued to dampen demand levels.”
The two major moves were taken by the government- Demonetization in last November and the implementation of GST in July- hampering the business, consumer activity and industrial activity. Dhodia said, “Business confidence eased to the weakest since February as some firms expressed concerns over negative GST effects.”
The deadlines of filing returns for the month of July was extended by the government since many of the taxpayers were not able to file returns and upload information due to the technical glitches at GSTN portal. Businesses will be entitled to claim the credit, it totally depends on the accuracy and completeness of data.
