India's manufacturing growth fell to its lowestin more than two years in September, 2011 , reinforcing fears that an extended period of high policy-rates is hurting growth, accqrding to a closely vatched index.
The HSBC India Purch:asing Managers' Index (PMI), based one survey of over 500 companies, fell to 50.4 from 52.6 in August and 53.6 in July. It was the lowest since March 2009, when the reading was below 5-0, indicating contraction. September's index also recorded the biggest one-month fall since November 2008.
The sub index for new orders, which reflects future output, declined for the sixth successive month, while export orders fell for a third month on the back of weakness in global economy.
The Reserve Bank of India (RBI) last week indicate·d it was not done yet with monetary pocicy tightening as inflation was still high. The bank has already raised rates 12 times since March 201 Oto tame inflation, which is at a.13-month high of9. 78%.
Economists expect the RBI toraise rates 6ne'more time but warn that target¥d growth will be hard .to achieve if the slump continues. "This ( fall in PMI) was driven by weaker orders, with export orders still contracting due to the weaker global economic conditions," HSBC said in a press release quoting its chief economist for India & ASEAN.
PMI is considered a fairly good indicator of manufacturing · activity the world over, but in the case of India, the large contribution of the unorganised sector yields a low correlation 1 with industrial growth.
However, the Index for Industrial Production (IIP) has been showing a weakening trend, having slipped to a 21-month low of 3.3% in July. The core sector, which consists of eight infrastructure industries and has a combined weight of 37.9% in the IIP, also grew at only3.5% in August.
The PMI data is in line with the suffering manufacturing activity in India as per other estimates. Producers are seeing that demand conditions are softening and the outlook is uncertain, therefore they are producing less.
Employment in the manufacturing sector ·declined for the second consecutive month, indicating it too was under pressure. This could be attributed to lower requirement of staff and rise in resignations as higher wage requests go unfulfilled, the HSBC statement said.
On the inflation front, input prices rose at an 11-month low rate, but despite signs of softening they still remain at historically high levels.
While decelerating slightly, the readings for input and output priGes suggest that inflation pressures remain firmly in place.
Most economists feel the RBI is close to the end of its rate hike cycle. Even the weekly -Wholesale Price Index . (WPI) estimates have started showing signs of softening, having fallen more than one percentage point.
still

Options

A. silent
B. now as before
C. nevertheless
D. quiet

Answer

B