Why in the news?
The Ministry of Statistics and Programme Implementation (MoSPI) will launch the Index of Services Production (ISP) in July 2026 as India’s first monthly indicator to measure short term growth in the services sector.
What is ISP?
- Index of Services Production (ISP) is a monthly high frequency indicator that measures changes in the real output (volume) of the formal services sector relative to a base year.
- It is the services sector counterpart of the Index of Industrial Production (IIP).
Key Highlights
- Nodal Ministry: Ministry of Statistics and Programme Implementation (MoSPI).
- Base Year: 2024-25.
- First Trial Release: 14 July 2026 (for 2025-26 and April 2026).
- Release Frequency: Monthly, with a 60 day time lag.
- Compiled using a fixed weight Laspeyres Volume Index.
- Weights are based on Gross Value Added (GVA) of service sectors.
Objectives
- Complement the Index of Industrial Production (IIP).
- Provide high frequency data on the services sector.
- Improve economic forecasting and business cycle analysis.
- Strengthen evidence based policymaking.
Coverage
- Included Sectors: Wholesale and retail trade, Transport, Banking and insurance, Telecommunications, Hotels and restaurants, Real estate, Professional, scientific and technical services, Arts, entertainment and recreation
- To be Included Later: Health services and Education services (after availability of ASISSE data).
Data Sources
- Administrative data: Air Transport, Railways, Banking and Insurance.
- GST (GSTR-1 outward supplies): Most service industries.
- Annual Survey of Incorporated Services Sector Enterprises (ASISSE): Health and Education.
Why is ISP Important?
- Services contribute over 50% of India’s Gross Value Added (GVA) since 2013-14.
- Provides timely tracking of service sector performance.
- Enables faster policy response and economic monitoring.
- Aligns India with international statistical practices.
Limitations
- Covers only the formal services sector.
- Excludes: Public administration and defence, Government health and education, Social work without accommodation, Household services, Activities of extraterritorial organisations, Gambling and betting, Other predominantly non market and informal services.
What is the proposed compilation formula?
- ISP is proposed to be compiled using a fixed-weight Laspeyres Volume Index
- Measures changes in output using fixed base year weights.
- Widely used for indices such as IIP due to ease of comparison over time.
[2020] Consider the following statements:
1.The weightage of food in the Consumer Price Index (CPI) is higher than that in the Wholesale Price Index (WPI).
2.The WPI does not capture changes in the prices of services, which the CPI does.
3.The Reserve Bank of India uses WPI as its key measure of inflation to decide changes in policy rates.
Which of the statements given above is/are correct?
[A] 1 and 2 only
[B] 2 and 3 only
[C] 1 and 3 only
[D] 1, 2 and 3


