The Ministry of Statistics and Programme Implementation (MoSPI) has released a detailed approach paper outlining plans to expand the Index of Services Production (ISP), a key economic indicator that tracks performance across India’s services sector. The ministry is inviting feedback from experts, government agencies and other stakeholders on the proposed methodology to include previously unmeasured service areas.
India’s services sector accounts for more than half of the country’s total economic value added, making it the largest contributor to growth. To monitor this sector’s performance, MoSPI began compiling the ISP on a monthly basis starting July 2026 using 2024–25 as the reference year. However, the current framework has significant gaps that the ministry now aims to address.
Key facts
- ISP monthly compilation launched on trial basis in July 2026 with 2024–25 base year
- Current framework covers 19 service sub-sectors, accounting for approximately 60 per cent of services-sector GVA
- Three new service areas proposed for inclusion: Education; Human Health and Residential Care; Public Administration and Defence
- These three sectors represent nearly 21 per cent of services GVA for 2024–25
- Expanded coverage will reach approximately 80 per cent of total services-sector GVA
- Approach paper available on www.mospi.gov.in
- Deadline for comments and suggestions: 16 October 2026
- Feedback email: ddgec.esd@mospi.gov.in
What the index measures
The Index of Services Production is a monthly statistical tool designed to track short-term economic movements within India’s services sector. Unlike slower quarterly or annual measures, the ISP provides timely data on how various service industries are performing, enabling policymakers and analysts to monitor economic trends in real time. The current version relies on high-frequency administrative data and GST outward supply records, which provide regular and reliable information about business activity.
Current gaps being addressed
The present ISP framework excludes three significant service areas: education services, human health and residential care services, and public administration and defence. These gaps exist partly because these sectors operate differently from commercial services. Government education and health services are non-market activities, meaning they are not primarily sold to consumers at market prices. Education and health services also benefit from GST exemptions. Public administration and defence are entirely government-run. Together, these three sectors account for one-fifth of all value added in India’s services economy, making their exclusion a substantial limitation in understanding overall services-sector performance.
How expansion will work
MoSPI has developed specific methodologies to incorporate these three sectors into the ISP. The approach paper details how data from these areas can be collected and integrated into the index framework without distorting the overall measurement. Once these sectors are added, the expanded ISP will capture approximately 80 per cent of the entire services-sector GVA, making it far more representative of the services economy as a whole. The final index will aggregate all sub-sectoral indices into a single unified measure, providing a comprehensive picture of how India’s services sector is performing month to month.
Importance for economic policy
Accurate measurement of the services sector is critical for India’s economic management. Policy decisions on interest rates, government spending, employment and industry support depend on reliable data about economic performance. An index that covers only 60 per cent of the sector leaves blind spots that can lead to incomplete understanding of economic trends. Education and health services employ millions of Indians and serve as essential public goods, while defence and administration are core government functions. Their inclusion in regular economic monitoring will give a clearer picture of the economy’s health and the impact of government policies.
What this means for you
If you track India’s economic indicators for research, investment, competitive exams or policy work, the expanded ISP will provide more complete data on services-sector trends. Businesses operating in education, healthcare, or public-sector services will see their contributions formally recognised in official economic statistics. Government agencies and researchers will be able to make better-informed decisions based on more comprehensive economic data.
What happens next
MoSPI is seeking views from economists, academics, government ministries and departments, state governments, financial institutions and other experts before finalising the expanded methodology. The deadline for submitting comments and suggestions is 16 October 2026. Feedback can be sent to ddgec.esd@mospi.gov.in. The approach paper is available on the MoSPI website for review.