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.
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.
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,
The Index of Services Production has main two primary objectives.
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.
This index will offer the high-frequency data on service industries and improving the quality of the economic analysis and supporting evidence-based policymaking.
The ISP will covers the wide range of the formal service industries that contribute significantly to the India’s economy.
Major sectors includes the,
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.
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,
Health and education services are also provided by the private incorporated enterprises that are are expected to be included later through survey-based estimates.
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.
The ISP will rely on three key data sources.
1. Administrative Data
Administrative records will be used for the sectors such as the,
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,
3. ASISSE Data
The Annual Survey of the Incorporated Services Sector Enterprises (ASISSE) will be also used to compile indices for the,
These sectors are exempt from the GST and therefore it requires the alternative data sources.
Creating the services production index has historically been challenging because the services differs significantly from manufactured goods.
Major obstacles included such as,
Unlike factories which produce the measurable goods, many services do not have easily observable output quantities but it making statistical measurement more complex.
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.
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.
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,
MoSPI has decided to release the trial or experimental ISP indices before launching the regular series.
This approach has been adopted because,
The trial phase will also help the experts to assess the reliability of the index and make necessary refinements before the full-scale implementation.
The introduction of the ISP is also expected to significantly improve the India’s economic monitoring capabilities.
Key benefits includes the,
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