A Temporary Blip
The sharp drop in Services PMI seems transitory, in the run-up to the new indirect tax regime—GST. It is entirely possible that businesses and corporates may have decided to postpone consumption, seeking more clarity on GST rates and attendant norms for input tax credit. And the rather smooth transition to GST should boost economic activity going forward. In tandem, we also need a regular index of services output, to keep better tab on segmented data.