A monthly survey on Monday revealed that the manufacturing sector in India hit a four-month high in July. The Nikkei Markit India Manufacturing Purchasing Managers' Index, a composite indicator of manufacturing performance, rose to 51.8 from 51.7 in June.

A reading above 50 denotes expansion while one below means contraction, reported PTI. Of the many growth boosters, more production and greater demand seem to have contributed to strengthening this sector.

However, there was not real hike in employment. Only 1% of the surveyed companies employed additional workers in July. Economist Pollyanna De Lima, the author of the report, said, “The ongoing muted trend for employment indicates that companies remain somewhat uncertain regarding the sustainability of the upturn."

Meanwhile, the depreciation of the rupee supported Indian exporters and saw the rise in new businesses. The industry is hopeful of further rate reduction from the Reserve Bank of India ever since Raghuram Rajan hinted at it during the policy review meet in June. The RBI Governor had said that if a good monsoon eased inflation, there could be reduction in the key policy rates. A reduced rate would boost investment.