India to launch new index for services sector monitoring
The services sector stands as one of the most vibrant and rapidly growing segments of India’s economy, contributing over half of the country’s GDP while creating millions of job opportunities. Recognized as a significant driver of economic transformation over the past decades, the need for effective assessment tools for this sector has become increasingly prominent.
Currently, unlike the Index of Industrial Production (IIP), there is no Index of Service Production (ISP) to monitor short-term changes in the services sector. The National Statistical Office (NSO) under the Ministry of Statistics and Programme Implementation (MoSPI) has been addressing the challenges involved in compiling an ISP due to limitations in available data. This absence has led to a crucial data gap that complicates the evaluation of the overall economic performance.
Leveraging GST Data for Enhanced Monitoring
Recent advancements in data collection in India have revolutionized the landscape, driven by the surge in data demand and the adoption of technology. The introduction of the Goods and Services Tax (GST) on July 1, 2017, has fundamentally altered economic analysis methods, making monthly GST collection figures a reliable indicator of economic activity. Beyond taxation purposes, the Goods and Services Tax Network (GSTN) has developed into a vital source of data related to production and supply across various sectors.
Development of the Technical Advisory Committee
To enhance the monitoring of the services sector, the NSO has proposed utilizing aggregated GST data while maintaining the confidentiality of individual data. This approach mandates a careful analysis to ensure the data’s statistical suitability. In response to this need, a Technical Advisory Committee on ISP (TAC-ISP) was established in May 2025. Comprised of 24 members, the committee has engaged in extensive discussions over the past year, resulting in the preparation of an Approach Paper aimed at compiling an ISP for the formal sector.
This Approach Paper provides a thorough examination of over 40 service sub-sectors with respect to data availability and coverage suitability. It also addresses the most appropriate price deflators and methods for standardizing these deflators. Key areas of focus include wholesale and retail trade, transport, banking, insurance, communication, hotel and restaurant industries, real estate, professional services, and entertainment.
Invitation for Feedback and Collaboration
MoSPI is actively seeking insights and opinions from experts, academicians, government ministries, state governments, financial institutions, and various stakeholders regarding the proposed methodology. The comprehensive Approach Paper is available on the MoSPI website for review. Feedback can be submitted via email to [email protected] by May 5, 2026. Engaging with this process will be crucial for shaping a reliable index that can adequately reflect the dynamics of India’s burgeoning services sector.
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