BENGALURU, Feb 1 Reuters India39;s manufacturing industry improved substantially at the start of 2024 with factory activity expanding at its fastest pace in four months in January on robust demand and an upbeat yearahead outlook, a private survey showed on Thursday.

The HSBC final India Manufacturing Purchasing Managers39; Index, compiled by SP Global, rose to 56.5 in January from December39;s 18month low of 54.9.

Although the final reading was a tad lower than a preliminary estimate of 56.9, it was comfortably above the 50mark that separates expansion from contraction. It has been above breakeven since June 2021.

India will remain the fastestgrowing major economy this year and next, bolstered by heavy government spending, according to a recent Reuters poll.

However, the government will target narrowing the fiscal deficit as a percentage of GDP, showed another Reuters poll. The budget for the fiscal year 202425, due to be announced later on Thursday, is expected to strike a balance between populist measures and fiscal prudence.

The PMI39;s new orders subindex, also supported by international demand, rose sharply to its highest since September, stretching the current sequence of expansion to over twoandahalf years.

India39;s final manufacturing PMI showed that manufacturing activity accelerated in January. Current output expanded on robust demand, with domestic orders growing at a faster pace than export orders, noted Ines Lam, economist at HSBC.

Strong demand and…