data serves as a reliable indicator of actual output.
By analyzing GST-based service transactions, MoSPI can estimate changes in production across multiple service industries.
What Are Deflators and Why Are They Important?
Most service sector data is collected in value terms. However, increases in revenue can happen because of higher prices. This is not the same as greater output.
To measure real growth, statisticians use deflators. Deflators remove the impact of inflation.
Proposed Deflators
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Wholesale Price Index (WPI) for wholesale trade
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Sector-specific Consumer Price Index (CPI) where available
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General CPI for banking and insurance
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CPI Non-Food for many other service sectors
While international guidelines prefer Service Producer Price Indices (SPPIs), these are only available quarterly. They are not suitable for a monthly index.
Why Are Trial Indices Being Released First?
MoSPI has decided to release trial or experimental indices first. This is a careful approach.
Reasons for Trial Release
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GST data is being used for statistical applications for the first time
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Some data sources are still evolving
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The methodology needs to be tested for stability and consistency
The trial phase will help experts assess the reliability of the index. It will allow necessary refinements before full-scale implementation.
The Technical Advisory Committee
The conceptual and methodological framework for the ISP was finalised in consultation with a Technical Advisory Committee (TAC). The TAC was constituted in May 2025.
The committee is headed by Debjani Ghosh, a fellow at NITI Aayog. It includes representatives from academia, industry associations, and ministries and departments.
The TAC's full report is scheduled for release in the first fortnight of July 2026.
Why Is the ISP Important for India?
The introduction of the ISP is expected to significantly improve India's economic monitoring capabilities.
Key Benefits:
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Better tracking of economic activity
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Timely assessment of service sector performance
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Improved policymaking and planning
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Enhanced business cycle analysis
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Stronger support for research and forecasting
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Greater transparency in economic statistics
The ISP will help India understand its economy better. It will support better decisions by policymakers, businesses, and investors.
Conclusion
The Index of Services Production is a landmark addition to India's statistical framework. For the first time, India will have a monthly, high-frequency measure of its largest economic sector.
The ISP will help policymakers, businesses, economists, and researchers understand short-term trends more accurately. It will complement the IIP in tracking economic trends. It will support evidence-based policymaking.
With its first release on July 14, 2026, the ISP marks a new chapter in India's economic monitoring. It finally gives the services sector the statistical attention it deserves.
Frequently Asked Questions (FAQ)
1. What is the Index of Services Production (ISP)?
The ISP is a monthly economic indicator that measures short-term changes in the output of India's services sector. It is designed as the services-sector counterpart to the Index of Industrial Production (IIP).
2. When will the ISP be launched?
The first trial indices for 2025-26 and April 2026 will be released on July 14, 2026. Thereafter, monthly data will be published on the 29th of every month.
3. What is the base year for the ISP?
The base year for the ISP is 2024-25, which aligns with the recently revised Consumer Price Index (CPI) series.
4. What data sources will be used for the ISP?
The ISP will draw on three main data sources: administrative records, GST returns, and the Annual Survey of Incorporated Services Sector Enterprises (ASISSE).
5. Why is the ISP important for India?
The services sector contributes over 50% of India's GVA, but until now, there was no monthly indicator to track its performance. The ISP will fill this gap, enabling better economic monitoring, policymaking, and forecasting.
Exam-Focused Quick Points
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Launch Date: First trial release on July 14, 2026
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Base Year: 2024-25
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Compilation Method: Fixed-weight Laspeyres volume index
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Data Sources: Administrative data, GST returns, ASISSE
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Coverage: Trade, transport, banking, insurance, telecom, hospitality, real estate, professional services, arts and entertainment
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Excluded: Public administration, defence, government health/education, personal services, informal sector
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Price Deflators: WPI, sector-specific CPI, general CPI
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Technical Advisory Committee: Constituted in May 2025, headed by Debjani Ghosh
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Publication Cycle: Monthly, with ~60-day lag, on the 29th of each month
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Significance: First monthly measure of India's largest economic sector