Air passenger service prices surged 31.94 per cent year-on-year in the first quarter of 2026-27, emerging as the sharpest price increase among the services tracked under India’s Service Producer Price Index (Service PPI) framework, according to provisional data released by the Ministry of Commerce and Industry on Monday.
The Service PPI, with the base year 2022-23, covers seven services and is aimed at providing a systematic measure of price movements at the producer or service-provider level. The framework is intended to strengthen India’s price statistics and improve the measurement of service-sector price movements.
The Air (Passenger) Service Price Index rose sharply to 126.4 in Q1 FY27 from 106.9 in the previous quarter, translating into year-on-year growth of 31.94 per cent.
Banking services showed mixed trends during the quarter. The Banking Service Price Index rose marginally to 100.9 in Q1 FY27 from 100.5 in Q4 FY26, but remained in negative territory on a year-on-year basis, declining 3.35 per cent.
Meanwhile, the Banking Service Contribution Index increased to 134.8 from 131.5, with its year-on-year growth accelerating to 6.90 per cent from 3.30 per cent in the preceding quarter.
The Management of Pension Funds Service Price Index recorded a notable increase, rising to 113.3 in Q1 FY27 from 103.8 in Q4 FY26. Its year-on-year growth stood at 5.20 per cent, reversing from a contraction of 0.76 per cent in the previous quarter.
Insurance service prices remained stable at an index level of 102.9. However, year-on-year inflation increased to 0.98 per cent in Q1 FY27 from 0.68 per cent in the preceding quarter.
Telecom service prices also remained unchanged, with the Service Price Index holding at 112.2. On a year-on-year basis, telecom service prices rose 0.72 per cent during the quarter, compared with 0.99 per cent in Q4 FY26.
Railway services recorded modest price movements. The overall Railway Service Price Index increased marginally to 103.4 from 103.3, with year-on-year inflation at 1.27 per cent.
Within railway services, the Railway Passenger Service Price Index remained unchanged at 103.5 and recorded year-on-year inflation of 3.50 per cent. The Railway Freight Service Price Index edged up to 103.3 from 103.2, with annual inflation at 0.10 per cent.
In contrast, the Securities Transaction Service Price Index declined to 89.9 in Q1 FY27 from 91.7 in the previous quarter. Its year-on-year movement was negative at 1.32 per cent, compared with growth of 0.55 per cent in Q4 FY26.
New framework for tracking service-sector prices
The Service PPI framework seeks to expand the measurement of price movements in India’s service sector and complement existing inflation indicators such as the Wholesale Price Index and Consumer Price Index.
The Ministry has released quarterly Service PPI data with a base year of 2022-23. The latest release contains provisional estimates for Q1 FY27 and final estimates for Q4 FY26.
The indices cover seven services but do not carry weights across the services because they do not represent the entire service sector. However, sub-service-level weights based on FY 2022-23 data have been used to calculate the PPI for individual services.
The Service PPI data for the second quarter of FY27 will be released on November 25, 2026.
(With agency inputs)
