The Markit India Business Outlook survey points to the weakest degree of optimism among private sector companies since composite data were first available in October 2009, and one that is well below the global average.

The 12-month outlook for business activity has, however, remained positive as a net balance of +17% of panellists expect growth (down from +22% in June).

Pollyanna De Lima, Economist, Markit said: "Although private sector companies in India expect economic conditions to improve over the course of the next year, sentiment is hampered by competitive pressures and forecasts of strong inflation rates. Output growth is set to soften, reflecting forecasts of a slowdown in demand. As a consequence, firms anticipate weaker rises in business revenues and profits.

"It is worrying to see hiring intentions hitting a new survey low, suggesting labour market softness over the coming year.

"Also of concern are inflationary pressures, with both input costs and output charges in India anticipated to rise at rates that surpass their respective global averages."

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