A key spoke in Indian economy's wheel isn't feeling same optimism as RBI

The manufacturing sector's deteriorating business sentiment underlines a view that the economic rebound is likely to be a bumpy one

A key spoke in the Indian economy’s wheel isn’t feeling the same optimism as the nation’s central bank, which cited strengthening economic recovery and rising inflation expectations as it delivered back-to-back interest rate increases.

The manufacturing sector, which contributes about 15 per cent of the nation’s gross domestic product, saw slack demand in the first quarter of the fiscal year ending March 2019, a survey by the Reserve Bank of India shows. Overall business sentiment deteriorated with order books, production, capacity utilization and exports taking a hit, compared with the preceding quarter.

That underlines a view that the economic rebound is likely