What is the Index of Services Production and why does it matter?

New Delhi, Jun 24, 2026

As the services sector drives more than half of India's GDP, the ISP aims to provide timely insights into its performance and growth trends

The Ministry of Statistics and Programme Implementation (Mospi) is preparing to launch the Index of Services Production (ISP), a first-of-its-kind monthly indicator that will measure activity across key service sectors.

The ISP is expected to complement the existing Index of Industrial Production (IIP), which measures the economic growth of the industrial sector, and provide a clearer picture of short-term economic activity in India's largest sector.

What is the Index of Services Production?

Much like the IIP tracks industrial output, the ISP will monitor how different service sectors are performing over time. This will help policymakers, businesses, economists, and investors understand short-term trends in the economy more accurately.

Initially, the ISP will cover key sectors such as trade, transport, banking, insurance, telecommunications, hospitality, real estate, professional services, and entertainment. Health and education services are expected to be added at a later stage once more data becomes available.

It is being developed with 2024-25 as the proposed base year and will primarily use Goods and Services Tax (GST) data to track activity. The government is expected to release the first set of trial ISP data on July 14, 2026. After that, the trial ISP data will be released about two months after the month being measured.

Why was an ISP needed?

For years, India relied on indicators such as services Purchasing Managers' Index (PMI), GST collections, sector-specific data, and quarterly Gross Domestic Product (GDP) estimates to gauge the performance of the services sector.

However, these measures offered only partial insights. While the IIP provided a monthly snapshot of industrial activity, there was no equivalent indicator for services. As a result, tracking short-term changes in a sector that contributes to over 50 per cent of India's GDP remained a challenge.

The ISP is expected to bridge this gap by providing a regular and structured measure of service sector production. It is also expected to become an important tool for national accounts compilation, government ministries and departments, economists, and researchers.

Why is India introducing the ISP now?

Unlike manufacturing, where production can often be tracked through the volume of goods produced, services are largely intangible and do not always have directly observable output measures.

As a result, compiling a comprehensive high-frequency services index was challenging due to limited administrative data, the diverse nature of service activities, and the lack of suitable price indices to measure output in volume terms.

However, significant improvements in India's data ecosystem over the past decade have made the ISP feasible. The availability of high-frequency GST data now allows statisticians to track activity across several service industries more effectively. In addition, the Annual Survey of Incorporated Services Sector Enterprises (ASISSE) is expected to provide data for sectors such as health and education, which are currently difficult to capture through GST records alone.

What will the ISP be based on?

The index will draw on multiple data sources to track activity across different service industries:

•     Administrative data for sectors such as air transport, railways, banking, and insurance

•     GST data for a wide range of sectors, including wholesale and retail trade, hospitality, road and water transport, warehousing, telecommunications, real estate, information technology services, professional services, and entertainment

•     Annual Survey of Incorporated Services Sector Enterprises (ASISSE) data for health and education services, which are expected to be incorporated into the framework at a later stage

According to MoSPI, the ISP methodology has been developed after studying international best practices and consulting experts through the Technical Advisory Committee on ISP.  

Why is the ISP important for India?

The ISP is expected to offer several benefits:

•     Better economic monitoring - Monthly data will allow policymakers to identify trends earlier and respond more effectively to economic changes

•     Improved policy decisions - A clearer understanding of service sector performance can help governments design targeted interventions and growth strategies

•     Stronger economic analysis - Economists will gain a more complete view of the economy when service sector trends can be analysed alongside industrial output

•     Filling a long-standing data gap - It addresses a long-standing gap in India's economic dashboard

[The Business Standard]