The Government on Tuesday introduced the Index of Services Production (ISP), India’s first high-frequency macroeconomic indicator designed to measure the performance of the country’s services sector. The new index is expected to strengthen economic monitoring, improve national accounts estimation and support evidence-based policymaking.
Announcing the initiative, the Ministry of Statistics and Programme Implementation (MoSPI) said the ISP will track short-term changes in the volume of output produced by the formal services sector relative to the base year 2024-25.
The Ministry has also released the first trial Index of Services Production for April 2026, covering 19 service sub-sectors, which account for nearly 60 per cent of India’s services economy.
The trial data showed that 14 of the 19 sub-sectors recorded double-digit year-on-year growth in April 2026 compared with the same month last year.
Among the fastest-growing segments were accommodation and food services (37.2%), retail trade (30.8%), administrative and support services (28.7%), real estate (27.7%), and telecommunications (22.8%).
For the full financial year 2025-26, the strongest-performing sub-sectors included accommodation and food services (35.6%), retail trade (30.5%), repair services (25.1%), wholesale trade (23.6%) and road transport (22.6%).
According to MoSPI, the introduction of the ISP fills a long-standing gap in India’s economic measurement framework, as the existing Index of Industrial Production (IIP) captures only industrial activity and does not reflect short-term trends in the services sector.
The Ministry said the services sector contributes 52.9 per cent of India’s Gross Value Added (GVA) and accounts for nearly 30 per cent of total employment, generating around 40 million jobs over the past six years.
The ISP has been developed using multiple high-frequency data sources, including Goods and Services Tax (GST) data, administrative records and the Annual Survey of Incorporated Services Sector Enterprises (ASISSE). Notably, GST data is being used for statistical applications for the first time.
The index currently covers sectors such as wholesale and retail trade, transport, telecommunications, information technology, real estate, professional services, accommodation and food services, arts and entertainment, banking and insurance. Government-dominated and non-market sectors, including public administration, defence, government health and education, and certain financial activities, have been excluded.
To ensure accurate measurement of real output, the Ministry will use price deflators, including the Consumer Price Index (CPI) and Wholesale Price Index (WPI), to remove the impact of inflation from nominal service revenues.
MoSPI said the conceptual framework for the index was developed by a Technical Advisory Committee constituted in May 2025, drawing on international best practices, including the OECD Compilation Manual for Index of Services Production and guidance from Eurostat.
The Ministry said monthly trial indices will be released with a lag of around 60 days, with data published on the 29th of every month, or the next working day if the 29th is a holiday.
Highlighting the significance of the new indicator, the Ministry said the ISP marks a major step in modernising India’s statistical system and will provide policymakers, researchers and businesses with timely insights into the country’s largest economic sector.
