Biz expectations fuel service sector growth

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Bangalore, Jul 6: A survey showed that India's services sector expanded at its fastest form in two years on Jun 2010, led by increases in business expectations and new orders.

The survey also showed that Indian services companies raised their charges for the seventh month running but that charge inflation rate was still weaker than the 20-month peak in Apr 2010.

Official data on Jun 2010 showed the wholesale price index rose an annual 10.16 percent in May up from 9.59 percent in April, driven mainly by higher food and energy prices.

HSBC said its input prices index fell further to a three-month low in Jun 2010 from a 20-month high in Apr 2010, signaling an easing of price pressures.

The Reserve Bank of India after the market close on Friday, Jul 2, raised its key short-term lending and borrowing rates by 25 basis points each, citing worries over inflation, in a move almost a month ahead of its scheduled review.

All six sub-sectors covered by the survey recorded a rise in new business since May, 2010 with post and telecommunications registering the fastest expansion.

Indian billionaire Mukesh Ambani's Reliance Industries made a dramatic return to the telecom business in Jun 2010 by buying Infotel Broadband, the only company to win a nationwide license in the broadband wireless spectrum auction.

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