Service sector -- backbone of the Indian economy -- grew in the month of October 2017, Nikkei's Purchase Managers Index (PMI) published by IHS Markit said on Friday. 

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The Nikkei India Services PMI Business Activity Index rose from 50.7 in September to 51.7 in October, however, remained below the long-run series average of 54.7.

Aashna Dodhia, Economist at IHS Markit, said, “The recovery from the implementation of the goods and services tax (GST) in July was sustained in the private sector in October, mainly radiating from service providers as growth in manufacturing was relatively subdued."

IHS Markit said that India's service sector reported the fastest rise in new business since June.

However, few key growth indicators remained relatively muted. “Although the degree of business confidence fell to the weakest since June, service providers retained an optimistic outlook regarding business activity over the coming 12 months, whilst the labour market was further reinforced as firms raised their payroll numbers over the month. On the price front, the service sector experienced further upward cost pressures as the rate of inflation quickened to the joint-fastest since April 2016. Encouragingly, the composite PMI was at the highest since June, supporting the IHS Markit forecast that GDP is on track to expand at 6.8% in FY 2017-18,” Dodhia said. 

The report further said that the overall upturn in the service sector was supported by rising new work for the second consecutive month in October. 

It said, 'Although service providers retained an optimistic outlook regarding activity over the coming 12 months, the level of business confidence fell to the lowest since June."