The accompanying chart shows how the Indian private sector contracted in November, in contrast to other countries that showed expansion in activity.

The contraction was, of course, due to the disruption in the economy as a result of demonetization.

The Nikkei India Composite PMI (Purchasing Managers’ Index) Output Index fell from a 45-month high of 55.4 in October to 49.1 in November. A reading below 50 indicates contraction.

The chart shows composite PMI, which includes both the services and manufacturing sectors, of several major economies. Note how India was the highest among them in October and there were hopes of a turnaround in activity. That hope has been belied.

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