Context: The Ministry of Statistics and Programme Implementation (MoSPI) is preparing to launch the Index of Services Production (ISP) in July 2026 to track short-term changes in the services sector.
About Index of Services Production (ISP):
What It Is?
- The Index of Services Production (ISP) is a macro-economic short-term indicator designed to measure monthly changes over time in the real volume of output produced by the services sector. It serves as a direct counterpart to the Index of Industrial Production (IIP) used for the industrial sector.
Nodal Ministry: The index is compiled, managed, and disseminated by the Ministry of Statistics and Programme Implementation (MoSPI) of the Government of India.
Aim and Objectives
- To capture high-frequency economic trends that complement the IIP on the short-term movement of the Indian economy.
- To provide planners and policymakers with timely information on the service industry’s performance to support evidence-based policy decisions, economic forecasting, and business cycle analysis.
- To effectively monitor a sector that has emerged as a dominant force, contributing over 50% of India’s Gross Value Added (GVA) since 2013–14.
How It Is Calculated:
- Data Sourcing Structure: Output data is pooled across three major operational pipelines:
- GST Database: Utilizes aggregated Service Accounting Code (SAC) data from GSTR-1 filings on outward supplies to reflect real-time service turnover.
- Administrative Records: Directly pulls secondary quantity metrics for sectors like Air and Railway transport, alongside performance logs for Banking and Insurance.
- ASISSE Surveys: Draws estimates from the Annual Survey of Incorporated Services Sector Enterprises for non-government Health and Education sub-sectors.
- The Deflation Process: Value-based (nominal) turnover data is deflated using designated indices to obtain real volume metrics. Wholesale trade utilizes the Wholesale Price Index (WPI); Banking and Insurance use General Consumer Price Index (CPI); while other sub-sectors rely on specific CPI divisions or CPI (Non-Food) as an acceptable proxy.
- Weight Assignment: Individual sector weights are strictly assigned based on their relative economic contributions to the Gross Value Added (GVA) pulled from National Account Statistics.
- Mathematical Formula: The final calculation is structurally compiled using a fixed-weight Laspeyres volume index formula.
Key Features:
- Base Year Selection: The series uses 2024–25 as its base year, satisfying the criteria for structural recency and alignment with the new series of the CPI.
- Primarily Formal Sector Coverage: The index reflects the formal corporate services sector because its baseline parameters are built around units officially registered under the GST net.
- Strategic Exclusions: It explicitly excludes core government, non-market, and heavily unorganized informal fields, including Public Administration and Defence, personal services, gambling, social work without accommodation, and central bank monetary activities.
- Initial Phased Rollout: Ssub-sectors like Health and Education (excluding Government) will be integrated into the framework later, once complete ASISSE survey reports are officially available.
- Monthly Release Cycle: Disseminated on a monthly basis with a structural lag of about 60 days, specifically scheduled for release on the 29th day of every month.
