India Plans Monthly Headline Services Production Index Covering 19 Sub-Sectors

India plans to introduce a headline Index of Services Production (ISP) within the next few months, giving the country its first official monthly gauge of services sector output, as per a Reuters report. 

19 Sectors Under Review 

The Ministry of Statistics and Programme Implementation (MoSPI) has already released trial monthly indices for 19 service sub-sectors, offering an early view of activity across nearly 60% of the formal services economy. 

The trial figures for April showed expansion. In total, 14 of the 19 sub-sectors recorded double-digit year-on-year growth, led by accommodation and food services, retail trade, and administrative services.  

Air transport was the only major segment to contract during the month, while railway transport remained broadly unchanged. 

Filling a Gap in Economic Data 

India currently publishes monthly indicators for manufacturing through the Index of Industrial Production (IIP) and private surveys such as the Purchasing Managers' Index (PMI).  

However, despite services being the country's largest economic sector, there is no official monthly measure tracking overall services output. 

The proposed headline ISP is to address this gap by providing a single monthly indicator of activity across the services sector. According to Statistics Secretary Saurabh Garg, the government is working towards releasing the composite index within the next few months. 

Coverage May Expand Over Time 

The ministry is evaluating whether sectors such as health and education should be included before the headline index is launched. The timeline will depend on the availability of reliable data from these segments. 

If additional data is not ready, the government may introduce the composite index using the existing 19 sub-sectors and expand its coverage later. At present, these sectors account for around 60% of India's formal services economy. 

Role in GDP Estimation 

According to Garg, the monthly services index will complement labour, industrial and infrastructure indicators, allowing policymakers to monitor economic activity more closely. 

The additional data is also expected to improve the compilation of quarterly national accounts and strengthen the robustness of India's GDP estimates. 

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Conclusion 

The new headline index is intended to provide a regular measure of services sector output and support the compilation of quarterly national accounts using broader monthly data. 

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