Services PMI dips to 58.8 in March

8220;Growth momentum in the services sector remains strong,although it eased a bit in March,8221; said Leif Eskesen,chief economist for India amp; ASEAN at HSBC.

The services sector contributes more than 55 per cent of India8217;s gross domestic product.

The new business index dropped to 58.4 in March,from February8217;s 59.6,with business expectations easing a bit but still robust.

The input price index rose in March,driven by booming wage costs which are helping to fuel inflationary pressures in the broader economy,the survey showed.

High food prices have kept India8217;s headline inflation high over the past year,and a spike in global crude oil prices above 100 a barrel run the risk of stoking price pressures.

8220;Inflation remains the dominant concern,not growth,calling for Reserve Bank of India to continue the tightening cycle,8221; Eskesen said.

The RBI hiked key interest rates by 25 basis points for the eighth time in a year on March 17 to try and reign in inflation,which has stayed stubbornly over the central bank8217;s comfort level of 5-6 per cent. The RBI is expected to raise key rates by 25 basis points at its next review on May 3.

India8217;s manufacturing sector continued to expand at a steady pace in March,supported by sustained new orders and output,while input prices were at their highest in at least six years,signalling further inflationary pressures,a survey showed on Friday.