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Manufacturing Gets Boost in India

The last time this happened was in early November, 2008

The fiscal stimuli are slowly, but surely, showing their effects on the Indian economy. The good news on the effect that governmental efforts to boost the spending and consumption story are having in India has out come before the official statistics have been made available.

The ABN AMRO Bank Purchasing Managers' Index (PMI), based on a survey of 500 companies, rose to 53.3 in April 2009 from the March figure of 49.5, climbing above the threshold of 50—the border that crucially divides expansion from contraction categories.

Compiled by the UK-based Markit Group, the survey indicates that manufacturing is contributing almost 16 per cent to India's gross domestic product. The latest reading is the highest in seven months and it has steadily risen after hitting a trough of 44.4 in December.

The boost in manufacturing index came from a surge in new orders. The new orders index rose to 54.9 from 49.5 in March.