Massive Shift: MoSPI Unveils Framework for New Services Production Index, Targeting 50% of GVA Sector

Massive Shift: MoSPI Unveils Framework for New Services Production Index, Targeting 50% of GVA Sector​

The services sector stands as a powerhouse in the Indian economy. It is described as the most dynamic and rapidly expanding segment, contributing nearly 53 percent of India's Gross Value Added (GVA). This robust sector generates substantial employment and has emerged as a key driver for national growth, investment, and exports.

The release of the Technical Advisory Committee on Compilation of the Index of Services Production (ISP) represents a major strengthening of India's statistical measurement system. ISP is poised to provide, for the first time, a comprehensive monthly measure tracking short-term movements within the nation's formal services sector. This new index is set to significantly complement existing IIP data.

Methodology and Data Sourcing for Services Production Index​

The compilation of ISP leverages the vast data available through the Goods and Services Tax (GST) framework. Every month, millions of businesses file GST returns detailing their outward supplies. For market-based services, this GST data closely mirrors production, as these services are typically produced and consumed simultaneously. By deflating GST-based outward supplies with appropriate price deflators, analysts can estimate real changes in service sector output on a monthly basis.

A key element of the methodology is its hybrid nature, relying on multiple information sources to meet India's unique needs. While GST provides extensive coverage for many market-based services (including trade, accommodation, and professional services), certain exempt categories require alternative data streams. These exempted services include Health and Education, large chunks of railways, individual life & health insurances, non-AC public transport, and the transportation of essential commodities.

To cover these gaps, ISP will draw upon specialized administrative datasets from aviation, banking, insurance, and ASISSE for health and education. This approach ensures that the ISP is a comprehensive blend of methodologies tailored to the intricacies of the Indian economy.

Committee Deliberations and Report Recommendations​

The Technical Advisory Committee on Index of Services Production (TAC-ISP) was constituted by MoSPI in May 2025, guided by industry and academia experts under the Chairpersonship of Ms. Debjani Ghosh, Distinguished Fellow, NITI Aayog. After an extensive consultative process that included a public Approach Paper released on April 27, 2026, the Committee finalized its recommendations.

The report details various conceptual and methodological aspects required for compiling ISP. These aspects cover sectoral coverage, selection of price deflators, the weighting structure, index compilation methodology, and the overall dissemination framework. The document also documents the rationale for adopting a universe approach to showcase the inherent dynamism within the sector.

Technical Specifications and Future Dissemination Timeline​

The report recommends employing a Laspeyres volume index with 2024-25 designated as the base year. Compilation of the index is slated to occur at the 2-digit NIC 2025 level, using Gross Value Added (GVA) weights for aggregation. This framework aims to provide a robust and internationally comparable mechanism for monitoring short-term shifts in India's services economy.

To ensure the timeliness of economic monitoring, the Committee recommends a monthly compilation schedule. The ISP is intended to be released within 60 days of its reference month. A trial run of the overall and sub-sectoral ISPs is also recommended initially. This pilot phase aims to gather crucial stakeholder feedback and validate the methodology against existing quarterly or annual datasets, with the first trial release scheduled for July 14, 2026.