Govt Proposes ISP To Track Services Output in Formal Sector, Releases Approach Paper

The Ministry of Statistics and Programme Implementation (MoSPI) has released an approach paper for creating an Index of Service Production (ISP) for the formal sector, as per a PIB report. The document outlines a method to track short-term changes in services output.  

Feedback has been sought from ministries, state governments, financial institutions and academic bodies. Comments can be submitted until May 5, 2026. 

Gap in Measuring Services Activity 

At present, there is no regular indicator to capture movements in the services sector. The Index of Industrial Production (IIP) provides monthly data for industry, but a similar measure for services is not available.  

This has made it difficult to assess near-term trends in a segment that accounts for over 50% of India’s gross domestic product and provides employment to a large workforce. 

Reliance on GST Data 

The proposed index is expected to draw on aggregated data from the Goods and Services Tax (GST) system. Introduced on July 1, 2017, GST collections are used as an indicator of economic activity.  

The Goods and Services Tax Network (GSTN) holds data on production and outward supplies across sectors.  

The ministry said it will use aggregated figures without accessing individual business data. It also noted that the data will need to be assessed for statistical reliability. 

Coverage of Sub-Sectors 

The approach paper reviews more than 40 sub-sectors within services, examining the availability of output data and its coverage.  

These include wholesale and retail trade, transport, banking, insurance, communication, hotels and restaurants, real estate and professional services.  

The paper also sets out methods for selecting price deflators and standardising base years to ensure consistency in estimates. 

Committee and Framework Development 

A Technical Advisory Committee on ISP (TAC-ISP) was set up in May 2025 to guide the process. The 24-member panel has held several rounds of discussions over the past year.  

The proposed framework is based on international practices while taking into account domestic data constraints. 

Read More: TRAI Seeks Industry Views on Scaling Public Wi-Fi Access Across India! 

Conclusion 

The ISP is intended to fill a gap in tracking services activity. The final structure will depend on feedback received and further review of data sources. 

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