India rolls out first Services Production Index to track services sector

The Government on Tuesday launched the Index of Services Production (ISP), India's first high-frequency macroeconomic indicator to measure the performance of the country's services sector, marking a significant step towards strengthening economic monitoring and evidence-based policymaking.
According to agency reports,the Ministry of Statistics and Programme Implementation (MoSPI) said the new index will track short-term changes in the volume of output produced by the formal services sector relative to the base year 2024-25. The Ministry also released the first trial ISP for April 2026, covering 19 service sub-sectors that account for nearly 60 per cent of India's services economy.The trial data showed that 14 of the 19 sub-sectors recorded double-digit year-on-year growth in April 2026 compared with the same month last year.Accommodation and food services emerged as the fastest-growing segment with 37.2 per cent growth, followed by retail trade at 30.8 per cent, administrative and support services at 28.7 per cent, real estate at 27.7 per cent and telecommunications at 22.8 per cent.For the full financial year 2025-26, accommodation and food services led growth with 35.6 per cent, followed by retail trade (30.5 per cent), repair services (25.1 per cent), wholesale trade (23.6 per cent) and road transport (22.6 per cent).
According to MoSPI, the introduction of the ISP fills a long-standing gap in India's statistical framework, as the existing Index of Industrial Production (IIP) captures only industrial activity and does not reflect short-term trends in the services sector.The Ministry noted that the services sector contributes 52.9 per cent of India's Gross Value Added (GVA) and accounts for nearly 30 per cent of total employment, generating around 40 million jobs over the past six years.
The ISP has been developed using multiple high-frequency data sources, including Goods and Services Tax (GST) data, administrative records and the Annual Survey of Incorporated Services Sector Enterprises (ASISSE). MoSPI said this is the first time GST data has been used for statistical applications.The index currently covers sectors such as wholesale and retail trade, transport, telecommunications, information technology, real estate, professional services, accommodation and food services, arts and entertainment, banking and insurance. Government-dominated and non-market sectors, including public administration, defence, government health and education, and certain financial activities, have been kept outside its scope.To measure real output accurately, the Ministry said the index will use price deflators, including the Consumer Price Index (CPI) and Wholesale Price Index (WPI), to eliminate the impact of inflation from nominal service revenues.
Speaking at the release of the trial indices, Chief Economic Advisor V. Anantha Nageswaran described the launch as a significant step in strengthening India's statistical system. "Statistics improve in the open, and this is a mark of confidence on the part of the Ministry of Statistics and Programme Implementation (MoSPI), not one of doubt," he said. He noted that the index measures output volumes using price deflators and stressed that developing reliable price indices for services remains a key investment area. Urging users to interpret the data carefully, he added, "Read the series, not a single reading or a single month's reading. A monthly index is a thermometer, not a diagnosis."

#WATCH | Delhi | Addressing the release of the trial indices for India's newly launched Index of Services Production (ISP), Chief Economic Advisor (CEA), Dr V. Anantha Nageswaran says, "Statistics improve in the open, and this is a mark of confidence on the part of the Ministry… pic.twitter.com/AhuAE0dBee

— ANI (@ANI) July 14, 2026

MoSPI said the conceptual framework for the ISP was developed by a Technical Advisory Committee constituted in May 2025, drawing on international best practices, including the OECD Compilation Manual for Index of Services Production and guidance from Eurostat.
The Ministry said monthly trial indices will be released with a lag of around 60 days and published on the 29th of every month, or the next working day if the 29th falls on a holiday.Describing the launch as a major milestone in modernising India's statistical system, MoSPI said the new indicator will provide policymakers, researchers and businesses with timely insights into the performance of the country's largest economic sector.