New Delhi: India is set to introduce a long-missing economic indicator that could fundamentally change how policymakers, investors and businesses track the country’s growth story. Beginning July, the Ministry of Statistics and Programme Implementation (MoSPI) will release the Index of Services Production (ISP), a monthly measure of output in the services sector that mirrors the role played by the Index of Industrial Production (IIP) for manufacturing.
The move addresses one of the biggest blind spots in India’s statistical architecture. While industry has long had a high-frequency production indicator, services — the largest contributor to the economy for more than a decade — have lacked an equivalent measure. With services accounting for more than 50% of India’s Gross Value Added (GVA) since 2013-14, the absence of a monthly output indicator has increasingly appeared out of step with the structure of the economy.
The new index arrives at a time when India is positioning itself as a services powerhouse, with banking, telecommunications, logistics, hospitality, professional services and digital businesses becoming key engines of growth. The ISP is expected to provide a clearer and more timely picture of how these sectors are performing between quarterly and annual economic releases.
Closing Data Gap
For years, economists have relied on a patchwork of indicators — from GST collections and bank credit growth to telecom subscriptions and transport volumes — to gauge the health of the services economy. The absence of a unified measure often made it difficult to assess short-term economic momentum accurately.
The ISP seeks to bridge that gap. MoSPI plans to release the index every month, with a lag of about 60 days, offering policymakers and markets a more granular view of economic activity.
The initiative has been developed under the guidance of a technical advisory committee. It was tasked with designing a methodology aligned with international statistical standards while adapting it to Indian conditions.
The trial monthly indices for the year 2025 -26 and for the month of April, 2026 will be released on July 14. Regular monthly trial releases will follow thereafter.
The index will initially cover formal-sector activities including wholesale and retail trade, transport, banking, insurance, telecommunications, hotels and restaurants, real estate, professional and technical services, and arts and entertainment. Health and education services are expected to be incorporated later as additional survey-based data become available.
GST Data Revolution
The timing of the ISP is closely linked to a transformation in India’s data ecosystem. One of the main reasons an index of services production could not be compiled earlier was the lack of reliable, high-frequency information on service-sector output.
Unlike factories, which produce tangible goods that can be counted, weighed or measured, services are largely intangible. Measuring the output of a software company, a bank or a consulting firm is inherently more complicated than measuring the output of a steel plant.
The introduction of the Goods and Services Tax (GST) has altered that equation. GST filings now generate a vast stream of transaction-level information across service industries, creating a data foundation that did not exist a decade ago.
MoSPI plans to use GST-based outward supply data as a primary source for many service categories. Administrative datasets will be used for sectors such as railways, aviation, banking and insurance, while the Annual Survey of Incorporated Services Sector Enterprises (ASISSE) will support future inclusion of health and education.
The use of GST data marks a significant shift in India’s statistical framework. Officials believe that the availability of large-scale, high-frequency digital records has made the compilation of a comprehensive services output index feasible for the first time.
However, the ISP will largely reflect the formal economy because it is built primarily on GST-registered entities. Large parts of the informal services sector, which remain significant in India, will not be directly captured.
Economic Policy Tool
Beyond statistical refinement, the ISP could become an important policy instrument.
High-frequency indicators help governments identify turning points in economic activity earlier than broader national accounts data. Just as the IIP offers insights into industrial momentum, the ISP is expected to provide early signals about demand conditions across service industries.
The index may also improve economic forecasting. Analysts tracking GDP growth often face challenges in estimating service-sector performance because of limited monthly information. A dedicated services output measure could reduce that uncertainty and strengthen business-cycle analysis.
For investors, the index could become a key market-moving data release, especially as services dominate listed sectors such as banking, telecom, information technology, logistics and hospitality.
The methodology also reflects India’s effort to align with international best practices. The index will use a fixed-weight Laspeyres framework, with sectoral weights derived from GVA contributions. Output estimates will be adjusted for inflation through sector-specific deflators, enabling measurement of real activity rather than nominal revenue growth.
The launch of the ISP represents more than the addition of another government statistic. It signals a recognition that India’s economy can no longer be understood primarily through factories, mines and power plants. In an economy increasingly driven by finance, technology, trade, logistics and professional services, policymakers are finally building a dashboard that reflects where growth is actually coming from.
For a country aspiring to become a $10 trillion economy, that shift may prove as important as the numbers the new index eventually reports.