Index of Services Production: India's New Monthly Economic Indicator

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The **Ministry of Statistics and Programme Implementation (MoSPI)** released the first trial **Index of Services Production (ISP)** for **April 2026**.
This trial index covers **19 service sub-sectors**, which together account for nearly **60% of India's services sector**.
The index framework was designed by the **Technical Advisory Committee on Index of Services Production (TAC-ISP)**, which was set up in **May 2025**.

The **Index of Services Production (ISP)** serves as India's first high-frequency monthly indicator to measure short-term output volume changes in the formal services sector.
The index uses **2024-25** as its base year, which aligns with the new **2024-based Consumer Price Index** series.
It relies on the **National Industrial Classification (NIC), 2025** framework to categorize sub-sectors across the economy.
Official data will be published on the **29th of every month** with a time lag of about **60 days**.
The ISP currently focuses only on the formal services sector, which generates **more than 50% of India's GDP**.
MoSPI plans to launch a single composite **Overall ISP** once individual sub-sector data becomes more stable and reliable.
The index design aligns with international standards, including the **OECD Compilation Manual for Index of Services Production (2007)** and **Eurostat** guidelines.

Because service sector output is collected in monetary values, MoSPI uses price deflators to remove inflation and calculate actual physical volume.
The **Wholesale Price Index (WPI)** is used to adjust data for the wholesale trade sector.
Specific sub-sector **Consumer Price Indices (CPI)** are used for most service categories, while **CPI-Services** is used when specific indices are absent.
The **CPI-General** index is applied to banking, insurance, and repair and maintenance services.
This index marks the first time that **Goods and Services Tax (GST)** outward supply data is used for official government statistics.
Tightly regulated sectors such as Railways, Aviation, Banking, and Insurance rely on administrative and secondary data streams.
The **Annual Survey of Incorporated Services Sector Enterprises (ASISSE)** provides weighting data and will later help cover non-government health and education sectors.

The inaugural ISP release revealed strong economic momentum, with **14 out of 19 sub-sectors** recording double-digit year-on-year growth in **April 2026**.
The **Accommodation & Food** sector recorded the highest growth rate at **37.2%**.
**Retail Trade** expanded strongly with a growth rate of **30.8%**.
**Administrative & Support Services** achieved an impressive growth of **28.7%**.
**Real Estate** registered a solid expansion of **27.7%**, while **Telecommunications** grew by **22.8%**.
Only two sub-sectors suffered contractions, namely **Air Transport** at **-13.9%** and **Railway Transport** at **-0.4%**.

The ISP currently excludes core government functions such as public administration, defence, and extraterritorial organizations.
Financial activities outside of regular banking and insurance, including central bank and money market operations, are kept out of the index.
Non-market services such as social work without accommodation, membership organizations, and private households employing domestic help are excluded.
Government-provided health and education services, along with gambling and betting activities, remain outside the current index scope.
These exclusions exist because such activities represent non-market services, direct government administration, or informal dominance where tracking short-term output is difficult.

The traditional **Index of Industrial Production (IIP)** covers only manufacturing, mining, and electricity, leaving a huge statistical gap in tracking services.
Because services contribute nearly **55% of India's GVA in 2024-25**, this monthly indicator will dramatically improve national income and GDP estimates.
High-frequency data enables policymakers and the **Reserve Bank of India** to detect early economic trends and respond quickly to market changes.
The use of GST and administrative data reduces the survey burden on businesses while delivering faster and more precise economic indicators.