India's Services PMI Slows in Feb 2024 Amid Rising Costs; Composite PMI Hits 3‑Month High — UPSC Current Affairs | March 4, 2026
India's Services PMI Slows in Feb 2024 Amid Rising Costs; Composite PMI Hits 3‑Month High
India's Services PMI slipped to 58.1 in February, indicating the slowest new‑business growth in over a year, while the Composite PMI rose to 58.9, marking a three‑month high. Rising operating costs and a revised inflation reading of 2.75% bring price pressures and RBI target‑band considerations into focus for UPSC economics preparation.
Overview The latest Services PMI for India fell to 58.1 in February from 58.4 in January, marking the slowest rise in new business since January 2025. At the same time, the overall Composite PMI rose to 58.9 , the fastest pace in three months. Key Developments New business growth slowed to its weakest level in over a year, reflecting heightened competition among service providers. International sales accelerated, registering the fastest rise since August, driven by stronger foreign demand. Operating expenses surged due to higher food, energy, and labour costs, the steepest cost pressure in 2½ years. Firms passed most of the cost increase to customers, pushing output prices up at the quickest rate in six months. Employment grew for the second consecutive month, with hiring picking up in February. Business confidence reached a one‑year high, buoyed by expectations of higher demand and marketing benefits. Important Facts The survey is compiled by S&P Global on behalf of HSBC India. The 50‑point threshold separates growth from contraction. The revised inflation series, introduced with a new base year of 2024 and re‑weighted components, showed inflation at 2.75% in January, bringing it back within the central bank’s target band for the first time in five months. UPSC Relevance Understanding the Services PMI and Composite PMI is crucial for GS‑III questions on economic indicators, sectoral performance, and monetary‑policy implications. The shift in cost pressures and price transmission highlights supply‑side inflation dynamics, a frequent topic in questions on price stability and RBI policy. The revised inflation methodology underscores the importance of statistical reforms, relevant for data‑analysis and policy‑evaluation modules. Way Forward Policymakers may need to monitor cost‑push inflation stemming from food and energy price spikes, while encouraging productivity gains in the services sector to sustain growth. Strengthening export‑oriented services could offset domestic demand weakness. For aspirants, tracking monthly PMI releases and RBI’s inflation targets will aid in answering current‑affairs and economy‑related questions in the UPSC exam.
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Overview
Cost‑push inflation slows services growth, urging RBI to tighten policy
Key Facts
Services PMI fell to 58.1 in February 2024, down from 58.4 in January.
Composite PMI rose to 58.9 in February, its highest level in three months.
New‑business index recorded its weakest expansion since January 2025.
Operating expenses surged, marking the steepest cost pressure in 2½ years.
Output‑price inflation accelerated to the fastest pace in six months.
Employment in the services sector grew for the second consecutive month.
Revised CPI inflation for January 2024 stood at 2.75%, back within RBI’s 2‑6% target band.
Background & Context
The Services PMI is a forward‑looking indicator of private‑sector activity, and the services sector contributes over 55% to India’s GDP. Rising input costs and price transmission signal cost‑push inflation, a key concern for the RBI’s price‑stability mandate and for fiscal‑policy coordination under the broader economic governance framework.
UPSC Syllabus Connections
Essay•Economy, Development and Inequality
Mains Answer Angle
GS‑III: Analyse how cost‑push inflation in the services sector can influence RBI’s monetary‑policy stance and suggest measures to sustain sectoral growth.