**Executive Summary**
The Government of India has introduced the Index of Services Production (ISP), the nation’s first high-frequency macroeconomic indicator dedicated to tracking short-term volume changes in the formal services sector. Using 2024-25 as its base year, the trial index was first released for April 2026, with regular monthly updates scheduled for the 29th of each month starting with a 60-day lag. The ISP aims to bridge the data gap in economic monitoring for the services sector, which contributes over 50% of India's Gross Value Added (GVA).
**Key Points / Main Content**
**Overview and Purpose**
* The ISP measures short-term changes in the volume of output produced by the formal services sector relative to the 2024-25 base year.
* It serves as a counterpart to the Index of Industrial Production (IIP), which focuses exclusively on industrial activity.
* The indicator is designed to strengthen national accounts estimation, improve economic monitoring, and support evidence-based policymaking.
**Trial Index Performance (April 2026)**
* The initial trial covers 19 sub-sectors, representing approximately 60% of the total services sector.
* In April 2026, 14 of the 19 sub-sectors recorded double-digit growth compared to April 2025.
* Leading growth sectors for April 2026 included accommodation and food (37.2%), retail trade (30.8%), and administrative and support services (28.7%).
**Methodology and Framework**
* The framework was developed by a Technical Advisory Committee (TAC) constituted in May 2025, aligning with international standards set by the OECD and Eurostat.
* The ISP uses price deflators to transform "value-based" (nominal) revenue data into "volume-based" (real) data to accurately reflect changes over time.
* The Wholesale Price Index (WPI) is used for wholesale trade, while various Consumer Price Index (CPI) series are applied to other sectors.
**Data Ecosystem and Sources**
* The index utilizes three primary data sources: administrative/secondary data (e.g., for air transport and banking), GST data, and ASISSE (Annual Survey of Incorporated Services Sector Enterprises) data.
* Notably, GST data is being used for the first time in statistical applications to track sectors like retail, telecommunications, and real estate.
* ASISSE data is specifically targeted for the health and education (non-government) sectors once available.
**Sectoral Coverage and Exclusions**
* The ISP covers sub-sectors where reliable high-frequency data is available, such as banking, insurance, transport, and hotels.
* Exclusions include public administration, defense, gambling, and informal sector activities, as these are either government-led or lack market-based data.
**Impact Analysis**
**Economic Ministries and Departments**
**Impact**
These bodies will benefit from more timely and frequent insights into the performance of India's largest economic sector, enabling better economic forecasting and business cycle analysis.
**Action Required**
Incorporate ISP data into policy response formulations and national economic monitoring frameworks.
**National Accounts**
**Impact**
The ISP provides a robust, high-frequency indicator that improves the accuracy of national accounts and GVA estimation for the services sector.
**Action Required**
Integrate ISP volume-based data to refine quarterly and annual GDP/GVA calculations.
**Researchers and Domain Experts**
**Impact**
Gains access to a standardized, international-level dataset to study the structural transformations and growth trajectory of India's services economy.
**Action Required**
Utilize the monthly releases (published on the 29th of each month) for evidence-based research and sectoral performance analysis.
Key Entities Referenced
Index of Services Production (ISP): A new macroeconomic indicator introduced by the Government of India to track short-term changes in the volume of output produced by the formal services sector.
Ministry of Statistics and Programme Implementation (MoSPI): The primary ministry responsible for developing the ISP's framework and overseeing its monthly compilation and release.
Annual Survey of Incorporated Services Sector Enterprises (ASISSE): A comprehensive survey launched to provide essential data for sectors like health and education to support the ISP's data ecosystem.
Technical Advisory Committee (TAC): An expert body comprising members from academia, industry, and government departments constituted to develop the ISP's methodological framework.
OECD Compilation Manual for Index of Services Production (2007): The primary international reference document used as a guide for compiling India's ISP in alignment with global statistical standards.
PIB Backgrounder
Index of Services Production:
Measuring the Pulse of India's Services Economy
प्रव तथ: 14 JUL 2026 8:57PM by PIB Delhi
Index of Services Production: A Window into Services Sector Performance
India has significantly strengthened its statistical and administrative data ecosystem over the past decade.
Some key developments include availability of high-frequency GST data, launch of Annual Survey of
Incorporated Services Sector Enterprises (ASISSE), and the expansion of digital administrative databases,
enabling more robust evidence-based policymaking.
Building on these reforms, the Government has introduced the Index of Services Production (ISP), a
new macroeconomic indicator to capture the performance of the services sector. The ISP is India's first
high-frequency indicator dedicated to measuring services sector output. It tracks short-term changes in the
volume of output produced by the formal services sector relative to a specified base year.
As services account for the largest share of India's economy, the ISP is expected to strengthen economic
monitoring, improve national accounts estimation, and support more informed policy decisions.
First Release: Trial Index of Services Production
The Government has released the first sub-sectoral trial ISP for 19 sub-sectors for April 2026, covering
~60% of the services sector.
Out of the 19 sub-sectors, 14 recorded double-digit growth in April, 2026 as compared to April, 2025.
Top 5 sub–sectors with strong monthly growth include accommodation and food (37.2%), retail
trade (30.8%), administrative & support services (28.7%), real estate (27.7%) and telecommunications
(22.8%).
The yearly top 5 sub-sectors for 2025-26 include accommodation and food (35.6%), retail trade
(30.5%), repair services (25.1%), wholesale trade (23.6%) and road transport (22.6%).
Key Features of the Index
With the introduction of ISP, India is advancing its statistical system with global standards. Some of the
key features of the index include:
The base year of ISP has been selected as 2024-25. This is well aligned with other sub-sectors that
use the new Consumer Price Index (CPI) series, also 2024-based.
Key users of the ISP include national accounts, economic ministries and departments,
researchers, and domain experts.Regular monthly trial indices will be released with a lag of ~60 days. Data will be available on the
29th of each month or the next working day if 29th is a holiday.
Currently, different price deflators are used for ISP compilation.
The Wholesale Price Index (WPI) is used for wholesale trade.
For most other sectors, the relevant Consumer Price Index (CPI) or the closest matching CPI is
used.
CPI–General is applied to repair & maintenance, banking, and insurance
CPI–Services is used for sectors where a specific CPI is not available.
Need for Deflator
The ISP tracks short-term changes in the volume of services produced. Since primary service data is
usually collected in value terms, it captures the effects of both the prices and value addition. A price
deflator is therefore required to remove the effects of change in prices from nominal service revenue.
A price deflator transforms "value-based" (nominal) data into "volume-based" (real) data,
providing accurate measurement of actual changes over time.
Building India’s ISP Framework
The Ministry of Statistics and Programme Implementation (MoSPI) constituted a Technical Advisory
Committee (TAC) in May 2025 to develop the ISP's conceptual and methodological framework. TAC
comprised experts from academia, industry associations, ministries and departments representing the
services sector. The proposed framework has been developed with reference to international best
practices.
The OECD Compilation Manual for Index of Services Production (2007) is the most comprehensive
set of guidelines on ISP compilation. Eurostat, the statistical office of the European Union is another key
global guide for ISP.
Notably, several advanced economies regularly publish an ISP or equivalent indicators, such as France,
Spain, and Slovenia. Beyond the EU, South Korea publishes a monthly Service Industry Activity Index
while the United Kingdom compiles a comprehensive Monthly Index of Services.Sectoral Coverage of the Index of Services Production
The ISP initially covers service sub-sectors where reliable, high-frequency data is available.
Excluded services sub-sectors from the ISP are- public administration and defence, financial services
excluding banking and insurance (such as activities of the central bank, money market funds), social
work activities without accommodation, services of membership organisations, personal services,
activities of private households with employed persons, activities of extraterritorial organisations,
health and education services provided by Government and gambling and betting activities.
These sectors are either related to core government activities or are dominated by non – market
activities and the informal sector.
The Data Ecosystem Powering ISPThree main data sources are used for compiling the ISP- administrative data, GST and ASISSE-
Administrative/secondary data for ISP of air transport, railway transport, banking and insurance.
ASISSE data (once available) for health and education (excluding Government) sectors. Launched
in April 2026, it aims to develop a comprehensive database of the incorporated services sector.
DID YOU KNOW?
GST data will be used for the first time in statistical applications.
GST data for wholesale trade, retail trade, repair and maintenance, accommodation and food, road
transport, water transport, warehousing and support activities for transportation, postal & courier,
telecommunications, information and broadcasting, real estate, information and computer related services,
professional, scientific & technical services including R & D, administrative & support services and arts,
entertainment & recreation, etc.
Why ISP Matters?
India's economy has undergone a significant structural transformation over the past few decades. It is
driven by economic reforms, technological advancements, and increasing integration with global markets.
The services sector has become a key driver of economic growth and employment generation.
It is the largest contributor to India’s GDP, contributing over 50% of the Gross Value Added
(GVA) since 2013-14. In 2024 -25, share of services GVA stood close to 52.9%.
The sector accounts for ~30% of total employment across India and generated ~40 million jobs
over the past six years.
India’s services exports maintained strong momentum in FY2026-27. Across April-June 2026-27,
services exports are estimated at USD 103.41 billion, registering a 6.16% Y-o-Y growth.
The Government aims to position India as a world leader in services, targeting a 10% share in global
services by 2047.
As the services sector is central to India's growth, a dedicated short-term indicator to track its performance
has become essential. The Index of Industrial Production (IIP) measures only industrial activity and
does not capture short-term trends in the services sector. To address this gap, the Government has
introduced the ISP.
A New Milestone in India's Economic Measurement
The launch of the ISP reflects India's commitment to modernising its statistical framework in line with a
rapidly evolving economy. By bringing high-frequency data and robust methodology together, the ISP
offers timely insights into India’s largest economic sector. As a monthly indicator, it strengthens economic
monitoring, improves policy responses and deepens the understanding of India's growth trajectory.
References
Ministry of Statistics & Programme Implementation
https://www.pib.gov.in/PressReleasePage.aspx?PRID=2284450®=48&lang=1
https://www.pib.gov.in/PressReleasePage.aspx?PRID=2277392®=3&lang=1
https://www.pib.gov.in/PressReleasePage.aspx?PRID=2255933®=3&lang=1
https://www.pib.gov.in/PressReleasePage.aspx?PRID=2269286®=48&lang=1
https://www.pib.gov.in/PressReleasePage.aspx?PRID=2249336®=3&lang=1Ministry of Commerce & Industry
https://www.pib.gov.in/PressReleasePage.aspx?PRID=2284139®=3&lang=1
PIB Archives
https://www.pib.gov.in/PressNoteDetails.aspx?NoteId=157804&ModuleId=3®=48&lang=2
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