India Launches Index of Services Production to Enhance Economic Data Infrastructure

Livemint - Economy · 11 Jul 2026 · 2 min read
Prelims · Economy Mains · GS3 Economy High relevance

India is set to launch the Index of Services Production (ISP) on 14 July 2026, a monthly indicator to track the services sector, which contributes over 53% of GVA, addressing a critical gap in economic statistics for better policymaking.

Key points

Index of Services Production (ISP) will be launched by the Ministry of Statistics and Programme Implementation (MoSPI) to provide high-frequency data on the services sector, complementing the Index of Industrial Production (IIP).

Services Sector contributes over 53% of India's Gross Value Added (GVA), making it the largest economic sector, yet it lacked a monthly tracking mechanism until now.

GST Data Utilization: The ISP will leverage aggregated GST data to measure real output, mapping service categories to National Industrial Classification (NIC) codes and adjusting for inflation.

Formal Services Coverage: Initially, the ISP will cover sectors like wholesale/retail trade, transport, banking, IT, and real estate, with health and education to be added later using ASISSE data.

Technical Methodology: The ISP will use a Laspeyres volume index with GVA-based weights, ensuring sectors with larger economic contributions are adequately represented.

Policy Impact: The ISP will enable better economic forecasting and policy decisions by providing timely data on the services sector, crucial for India's growth trajectory.

[GS3-Economy] The ISP's launch aligns with India's shift towards a services-dominated economy, highlighting the need for robust data to inform fiscal and monetary policies.

Way Forward: Expand ISP coverage to include informal services, develop Service Producer Price Indices (SPPIs) for accurate deflation, and integrate ISP data with quarterly GDP estimates for comprehensive economic analysis.

Key terms

Index of Services Production (ISP)

A monthly volume index launched by MoSPI to measure real output changes in India's services sector, using GST data and administrative records. It addresses a critical data gap for policymaking in India's largest economic sector, contributing over 53% of GVA.

Gross Value Added (GVA)

The measure of the value of goods and services produced in an economy, minus the cost of inputs and raw materials. For UPSC, it's crucial for understanding sectoral contributions to GDP and economic growth patterns.

Laspeyres Volume Index

A method to measure changes in quantities using fixed base-year prices, ensuring comparability over time. Its use in ISP ensures consistent measurement of services output, relevant for GS3 economic statistics questions.

Annual Survey of Incorporated Services Sector Enterprises (ASISSE)

A survey by MoSPI collecting data on the services sector's performance. It supplements GST data for ISP, particularly for non-GST sectors like health and education, important for comprehensive economic analysis.