
In a recent survey, it was revealed that India's private sector experienced its fastest growth on record in August, driven primarily by a significant surge in demand from the services sector. This growth allowed companies to increase prices at the highest rate seen in over 12 years, indicating a booming economy.
The flash India Composite Purchasing Managers' Index (PMI), compiled by S&P Global, skyrocketed to 65.2 in August from 61.1 the previous month, surpassing the median forecast of 60.5 from a Reuters poll. This marked the highest level since the survey's inception in December 2005, with growth continuing for the 49th consecutive month.
The expansion was supported by a notable increase in total new orders, the highest in nearly 18 years. International demand also played a significant role, with new export business growing at the fastest pace since data collection began in 2014.

The services sector led this growth, recording an activity index of 65.6, while the manufacturing sector also demonstrated strength, with a preliminary PMI of 59.8, the highest since January 2008. This rapid pace of activity led to a significant rise in job creation, as businesses enjoyed increased pricing power.
In response to higher wage and raw material costs, companies passed on these increases to customers at the most aggressive rate since February 2013, driven by strong demand. While this may lead to broader inflation, it could also impact expectations for a potential interest rate cut by the Reserve Bank of India (RBI) in the next quarter.
Despite pricing pressures, firms are optimistic about the future, with sentiment for the year ahead reaching its strongest level since March. This positive outlook reflects the overall confidence in the economy's trajectory.
The robust expansion of India's private sector, driven by soaring demand and accompanied by pricing power, sets the stage for a dynamic period of growth and highlights the resilience of the country's economy in the face of global challenges.