New Delhi, March 3 (KNN) India’s manufacturing activity measured by the HSBC Manufacturing Purchasing Managers’ Index (PMI), fell for the second consecutive month, to 51.2 in February from 52.9 in January. A reading above 50 separates growth from contraction.

The PMI expanded at its slowest pace in five months in February as a slowdown in new orders dragged on overall output, a business survey showed on Monday.
 
With a slew of measures announced in the Budget 2015-16, like liberalising flow of foreign investments, enhanced allocation to infrastructure, facilitating tax regime, assurance of rolling GST out and the umbrella programme of “ Make in India’, Government looks forward to promote manufacturing in the country. However, the looming budget deficit and the uncomfortable inflation rate may spoil the party.
 
Again, the reaction of the market to the budget is mixed, While private Banks led by Axis Bank and Capital Goods suppliers like BHEL showed good gains in stock markets, power utilities and auto companies like Bajaj, Hero, Tata Motors trailed putting the markets in jitter. Do these indicate a doubt on effectiveness of Government announcements?
 
On a positive note, foreign orders rose at a strong and accelerated pace, while the PMI remained in positive territory. These factors brighten the prospects for a rebound in output and employment in coming months.
 
Indeed, February marks the 16th straight month of factory activity expansion. And if India can grow as strongly in the coming fiscal year as the government said in its newly-released budget — expanding by up to 8.5 per cent — that should boost manufacturing. (KNN/DB)