MoSPI releases approach paper on index of services production for formal sector

The Ministry of Statistics and Programme Implementation MoSPI has released an approach paper for compiling the Index of Service Production ISP for the formal sector of the economy, according to a statement. Inviting feedback from stakeholders on the approach paper, the ministry highlighted that at present, there is no Index of Service Production ISP to capture short-term movements in the services sector.

The Ministry of Statistics and Programme Implementation (MoSPI) has released an approach paper for compiling the Index of Service Production (ISP) for the formal sector of the economy, according to a statement. Inviting feedback from stakeholders on the approach paper, the ministry highlighted that at present, there is no Index of Service Production (ISP) to capture short-term movements in the services sector. The services sector is the most dynamic and rapidly expanding segment of the economy. In terms of economic significance, the services sector contributes more than half of India's GDP, generates millions of jobs and has been a major catalyst for the country's economic transformation in the last few decades, the MoSPI said. Unlike the Index of Industrial Production (IIP) for the industrial sector, at present, there is no Index of Service Production (ISP) to capture short-term movements in the services sector. The NSO, MoSPI, has been grappling with the issue of compilation of the Index of Service Production for quite some time. The unavailability of an ISP created a critical data gap in assessing overall economic performance, the ministry noted. Recent times have seen a huge change in the data landscape in India, fuelled by data demand, adoption of technology and digitalisation of administrative and secondary data sources. The implementation of the Goods and Services Tax (GST) in India on July 1, 2017, marked a fundamental shift in economic analysis as monthly GST collection data acts as a powerful barometer for economic activity. Beyond its primary goal of taxation, the Goods and Services Tax Network (GSTN) has emerged as a powerful data source for production and outward supplies across different sectors of the economy. The NSO, MoSPI proposes to use the aggregated GST data to monitor the progress of services sector.. The MoSPI does not have access to nor does it require individual unit-level data for this purpose, thus preserving the confidentiality of such disaggregated information. However, the data requires careful analysis of its suitability for statistical purposes. To take this forward, a Technical Advisory Committee on ISP (TAC-ISP) had been constituted in May, 2025. Twenty four members of the TAC – ISP, over the past year, have held several deliberations and an Approach Paper on the compilation of ISP for the formal sector has been prepared.. The proposed approach has been developed in reference to international best practices and in consultation with members of the TAC-ISP. The approach paper comprehensively analyses more than 40 sub–sectors of the services sector in terms of the availability of output data and their coverage. The paper also discusses the availability of the most appropriate price deflators and methods to standardise the base of these deflators. The key sub–sectors covered include wholesale and retail trade, transport, banking, insurance, communication, hotels and restaurants, real estate, professional, scientific and technical services, arts, entertainment and recreation, etc. The MoSPI invited views and comments from experts, academicians, Central government Ministries/ departments, State governments, financial institutions and other stakeholders on the proposed methodology. Comments and suggestions may be sent by May 5, 2026, it stated.