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India’s service sector activity expanded further in the month of June at fastest pace, on the back of further accelerations in growth of new business and output at Indian services companies amid ongoing improvements in demand conditions.

As per the survey report, the seasonally adjusted S&P Global India Services PMI Business Activity Index surged to 59.2 in June from 58.9 in May. Further, the S&P Global India Composite PMI Output Index -- which measures both manufacturing and services -- however marginally fell to 58.2 in June from 58.3 in May.

The report noted a substantial upturn in new work intakes at the end of the first fiscal quarter, with the rate of increase improving to the best in over 11 years. On the inflation front, input costs continued to rise at a historically elevated pace, although one that was the slowest in three months, while charge inflation hit a near five-year high.

According to the report, unrelenting inflation continued to concern businesses, who were cautiously optimistic about the year-ahead outlook for business activity. The overall level of sentiment was well below its long-run average as only 9% of companies forecast output growth.