India To Launch New Services Production Index To Track Economic Growth

The government is set to introduce a new macroeconomic indicator, the Index of Services Production (ISP) , aimed at measuring short-term changes in India’s services sector output , the Ministry of Statistics and Programme Implementation (MoSPI) said.

The Index of Services Production (ISP) will serve as a monthly high-frequency indicator , tracking the real growth of the services economy, similar to how the Index of Industrial Production (IIP) tracks industrial activity. The base year for the new index has been set at 2024–25 .

MoSPI plans to release trial indices in July 2026 , including monthly data for 2025–26 and April 2026. Regular monthly releases will follow thereafter with a lag of around 60 days.

The ISP is designed to reflect changes in the output of key service sectors such as wholesale and retail trade, transport, banking, insurance, telecommunications, hotels and restaurants, real estate, professional services, and entertainment activities . Health and education services will be included later once survey-based data systems are fully integrated.

The index will primarily capture the formal services sector , as it is largely based on GST and administrative datasets. It will not fully cover informal or non-market activities.

To compile the ISP, MoSPI will use multiple data sources, including GST outward supply data , administrative records from sectors like railways and banking, and the Annual Survey of Incorporated Services Sector Enterprises (ASISSE) . These will be converted into real output using appropriate price deflators such as CPI and WPI , ensuring that inflation effects are removed from value data.

According to the ministry, the ISP will be compiled using a fixed-weight Laspeyres index method , with sectoral weights derived from Gross Value Added (GVA) estimates in the national accounts.

Officials said the introduction of ISP is significant because the services sector contributes over 50% of India’s GVA , but previously lacked a dedicated high-frequency indicator for tracking its performance. The new index will help policymakers, researchers, and economists monitor economic trends, business cycles, and sectoral performance in near real time .

In essence, the ISP is expected to provide a comprehensive statistical snapshot of India’s services economy , strengthening the country’s economic monitoring framework and supporting evidence-based policy decisions.