India Launches Index of Services Production (ISP) to Track Services Sector Growth

Key Facts

• The Government of India launched the Index of Services Production (ISP) to track output in the formal services sector.
• ISP uses the base year 2024-25, consistent with the 2024-based Consumer Price Index (CPI) series.
• The index is compiled monthly and published usually on the 29th of each month or the next working day, with approximately a 60-day time lag.
• It covers 19 sub-sectors, representing roughly 60% of the formal services economy.
• Data sources include administrative data (for air transport, railway transport, banking, and insurance), the Annual Survey of Incorporated Services Sector Enterprises (ASISSE) initiated in April 2026, and high-frequency Goods and Services Tax (GST) data.
• The ISP uses price deflators like the Wholesale Price Index (WPI) for wholesale trade, CPI for general repair & maintenance, banking, insurance, and a CPI-Services deflator for sub-sectors without specific CPI.
• In April 2026, fourteen of the nineteen sub-sectors showed double-digit growth compared to April 2025.
• Key high-growth sub-sectors for April 2026 included Accommodation and food services (37.2%), Retail trade (30.8%), Administrative and support services (28.7%), Real estate (27.7%), and Telecommunications (22.8%).
• The services sector contributed 52.9% of India’s Gross Value Added (GVA) in 2024-25 and accounted for about 30% of total employment.
• ISP excludes certain sectors such as public administration and defense, financial services other than banking and insurance, social work without accommodation, personal services, and government-provided health and education services.
• The framework aligns with international statistical guidelines from the OECD (2007 Compilation Manual for Index of Services Production) and Eurostat methodologies.

Background & Context

India's services sector is the largest segment of its economy. Prior to ISP, short-term formal services output lacked a dedicated high-frequency indicator, unlike the industrial sector which is monitored by the Index of Industrial Production (IIP). The ISP fills this gap, enabling better economic monitoring, national accounts estimates, and policy making. The Ministry of Statistics and Programme Implementation (MoSPI) formed a Technical Advisory Committee (TAC) in May 2025 to develop the ISP's methodological framework. The Index relies on three core data sources: administrative data (covering sectors like air and railway transport, banking, insurance), the ASISSE which surveys incorporated services enterprises, and GST returns, marking the first direct use of GST data for high-frequency official statistics in India.

Why This Matters for Exams / Exam Relevance

Understanding the ISP is important for grasping India's economic data evolution and sectoral structures. It represents a major statistical innovation using modern data sources such as GST to track formal services output with short lags. The index provides insight into sectoral contributions to GDP and employment and highlights government policies targeting services growth, such as the aim for India to capture a 10% share of global services exports by 2047. Exam questions may focus on ISP’s launch year, base year, institutional framework (MoSPI, TAC), data sources (administrative, GST, ASISSE), coverage, exclusions, and growth trends in key service sub-sectors. Comparisons with IIP and international practices may also be relevant.

Points to Remember

• ISP was launched in 2026 with base year 2024-25.
• MoSPI established a Technical Advisory Committee in May 2025 to formulate the ISP methodology.
• The index is published monthly with approximately 60 days lag, covering 19 formal services sub-sectors.
• Data sources: administrative data, GST returns, and Annual Survey of Incorporated Services Sector Enterprises (ASISSE) started in April 2026.
• Price deflation employs WPI, various CPI indices, and CPI-Services based on sub-sector.
• The services sector comprised 52.9% of India's GVA in 2024-25 and accounted for roughly 30% of employment.
• April 2026 saw strong double-digit growth in fourteen sub-sectors, notably Accommodation and food services and Retail trade.
• The ISP complements the Index of Industrial Production (IIP) by covering short-term trends in services output.
• The government aims for a 10% share in global services exports by 2047.
• ISP methodology follows international best practices from OECD and Eurostat, similar to indices in countries like the UK and South Korea.