S&P Global India Services PMI Business Activity Index rose from 60.1 in August to 61 in September.
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The services sector growth in India rose to a 13-year high in September on sharp increase in new business amid strong demand conditions, and job numbers continued to increase as overall business mood improved, a monthly survey said on Thursday.
The seasonally adjusted S&P Global India Services PMI Business Activity Index rose from 60.1 in August to 61 in September, signalling a sharp upturn in output.
In Purchasing Managers' Index (PMI) parlance, a print above 50 means expansion while a score below 50 denotes contraction.
The survey is compiled from responses to questionnaires sent to a panel of around 400 service sector companies.
The latest data showed a substantial increase in new business placed with Indian service providers, one that was the second-fastest since June 2010.
Besides the rise in total sales, firms noted an upturn in demand from abroad, particularly from clients based in Asia, Europe and North America.
"The latest PMI results brought more positive news for India's service economy, with September seeing business activity and new work intakes rising to one of the greatest extent in over 13 years," said Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence.
According to the survey, confidence in the outlook improved, with survey members forecasting healthy market dynamics and buoyant demand for the year ahead.
The level of positive sentiment was at its highest for over nine years. An upturn in business optimism about the year ahead, fuelled by buoyant demand conditions, bode well for further growth across the service sector. Job creation sustained as the business mood improved.
"Services charges rose at a softer rate as cost pressures receded to one of the lowest in two-and-a-half years. Although the latter indicates that near-term output price inflation may cool, worries about potential fluctuations in food prices due to El Niño means the RBI is highly unlikely to cut rates until early next year," Lima said.
The RBI governor-headed six-member Monetary Policy Committee (MPC) started its three-day meeting on Wednesday. Governor Shaktikanta Das will announce the decision on Friday (October 6).
Meanwhile, the S&P Global India Composite PMI Output Index was up from 60.9 in August to 61 last month. Buoyant demand for Indian goods and services underpinned the second-sharpest increase in aggregate new business for over 13 years in September, the survey said.