India to Launch ISP (Index of Services Production) in July 2026: Key Facts, Benefits and Significance

India is set to launch the Index of Services Production (ISP) framework in the month of July 2026. It is developed by the Ministry of Statistics and Programme Implementation (MoSPI) and it will serve as the monthly indicator which measures the short term changes in the performance of the service sectors. It is similar to the Index of Industrial Production (IIP) which will tracks the industrial output and it will provide timely insights into the service sector growth.

What Is the Index of Services Production (ISP)?

The Index of Services Production (ISP) is the high frequency economic indicator which measures the changes in the volume of output that is produced by service industries over time.

It will tracks the real growth of the services relative to a fixed base year which has been selected as the year 2024-25.

The ISP has been designed to capture the short-term movements in the services sector and it provides the clearer picture of the economic activity. Just similar to the IIP showcases the trends in the manufacturing and industrial production and the ISP will focus on the India’s expanding services economy.

The Ministry of Statistics and Programme Implementation plans to release the first trial indices for the year 2025-26 and April 2026 on 14th of July, 2026.

Why Does India Need an ISP?

The services sector has become the largest contributor to the India’s economy. Since the year 2013-14, it has consistently accounted for more than half of the country’s Gross Value Added (GVA).

Despite the dominant role of services, India lacked the dedicated monthly indicator to measure service sector output. Also policymakers often had to rely on the quarterly estimates and indirect indicators which made it difficult to assess the short term changes in economic activity.

The ISP aims to fill this gap by providing the,

Timely information on service sector performance
Better monitoring of the economic growth
Improved policy formulation and evaluation
Enhanced economic forecasting
Stronger support for national accounts and research

Key Objectives of the ISP

The Index of Services Production has main two primary objectives.

Tracking Economic Trends

The ISP will complement the Index of Industrial Production by providing the broader picture of the economic activity of the country.

Together, these indicators will helps to assess short-term movements in the economy.

Strengthening Statistical Infrastructure

This index will offer the high-frequency data on service industries and improving the quality of the economic analysis and supporting evidence-based policymaking.

Which Sectors Will Be Covered Under the ISP?

The ISP will covers the wide range of the formal service industries that contribute significantly to the India’s economy.

Major sectors includes the,

Wholesale Trade
Retail Trade
Transport Services
Banking
Insurance
Telecommunications
Hotels and Restaurants
Real Estate Activities
Professional Services
Scientific and Technical Services
Information Technology and Computer Services
Administrative and Support Services
Arts, Entertainment and Recreation

These sectors represents the substantial share of the India’s formal services economy and it will help to create the comprehensive picture of service sector growth.

Which Sectors Will Not Be Included?

There are certain services are excluded from the initial ISP framework because they are dominated by the government activities, informal operations or non-market services.

Excluded sectors includes the,

Public Administration and Defense
Government Health Services
Government Education Services
Social Work Activities without Accommodation
Personal Services
Activities of Private Households with Employed Persons
Gambling and Betting Activities
Some Financial Services beyond Banking and Insurance

Health and education services are also provided by the private incorporated enterprises that are are expected to be included later through survey-based estimates.

How Will the ISP Be Compiled?

MoSPI has proposed the Fixed-Weight Laspeyres Volume Index methodology for the compilation of the ISP. This is a globally accepted statistical method used to measure the changes in output over time.

Main Data Sources

The ISP will rely on three key data sources.

1. Administrative Data

Administrative records will be used for the sectors such as the,

Air Transport
Railway Transport
Banking
Insurance

2. GST Data

The Goods and Services Tax (GST) system has emerged as the crucial source of the information for measuring service sector output.

GST data will support the compilation of the indices for the,

Wholesale and Retail Trade
Telecommunications
Accommodation and Food Services
Road Transport
Warehousing
Real Estate
Information Technology Services
Professional Services
Administrative Support Services

3. ASISSE Data

The Annual Survey of the Incorporated Services Sector Enterprises (ASISSE) will be also used to compile indices for the,

Health Services
Education Services

These sectors are exempt from the GST and therefore it requires the alternative data sources.

Why Was ISP Difficult to Compile Earlier?

Creating the services production index has historically been challenging because the services differs significantly from manufactured goods.

Major obstacles included such as,

Lack of reliable high-frequency service sector data
Limited administrative records
Difficulty measuring intangible outputs
Absence of suitable service-sector price indices
Wide diversity of service activities

Unlike factories which produce the measurable goods, many services do not have easily observable output quantities but it making statistical measurement more complex.

What Has Changed in the Recent Years?

There are several developments have made the ISP feasible today.

The implementation of the GST has generated large volumes of structured data on service transactions across the various industries.

Government agencies now have access to the better-quality administrative information for sectors such as the banking, insurance, railways, and aviation.

The launch of the Annual Survey of Incorporated Services Sector Enterprises will also provide the reliable estimates for those sectors which are not covered through GST.

Together, these improvements have strengthened the India’s statistical ecosystem and also enabled the creation of the ISP.

Understanding the Role of GST Data

GST data plays the central role in the ISP framework.

Businesses which are registered under GST file returns that include the information about outward supplies of goods and services.

These transactions are classified using the Service Accounting Codes (SACs), which can be mapped to the National Industrial Classification (NIC) codes.

As the services are generally consumed soon after production, turnover data serves as the reliable indicator of the actual output.

Also by analyzing the GST-based service transactions, MoSPI can estimate the changes in production across multiple service industries.

What Are Deflators and Why Are They Important?

Most service sector data is collected in the value terms. However, increases in revenue can occur because of the higher prices rather than greater output.

To measure the real growth, statisticians uses the deflators which remove the impact of inflation.

Deflators Proposed for ISP

The proposed deflators includes the,

Wholesale Price Index (WPI) for Wholesale Trade
Sector-specific Consumer Price Index (CPI) where available
General CPI for Banking and Insurance
CPI Non-Food for many other service sectors

Why Are Trial Indices Being Released First?

MoSPI has decided to release the trial or experimental ISP indices before launching the regular series.

This approach has been adopted because,

GST data is being used extensively for the statistical measurement for the first time.
Some data sources are still evolving.
The methodology needs to be tested for stability and consistency.

The trial phase will also help the experts to assess the reliability of the index and make necessary refinements before the full-scale implementation.