India is preparing to launch a headline Index of Services Production (ISP) within the next few months, creating the country's first official monthly indicator for the services sector.
The ministry has released trial indices for 19 service sub-sectors covering around 60% of the formal services economy, while considering adding sectors such as health and education before launching the composite index.
Officials say the new index will improve real-time assessment of economic activity, strengthen quarterly national accounts, and enhance the robustness of India's GDP estimates.
Tracking India's Services Economy Just Got Easier; New Monthly Index Coming Soon, Says MoSPI Secy
The proposed headline Index of Services Production will provide India's first official monthly measure of output across the country's dominant services sector
Summary
Advertisement
India is preparing to introduce a headline Index of Services Production (ISP) within the next few months, marking the country's first official monthly indicator to track output across its dominant services sector.
The move is expected to provide policymakers, investors and economists with a more comprehensive measure of economic activity beyond manufacturing.
The Ministry of Statistics and Programme Implementation (MoSPI) recently released trial monthly indices for 19 service sub-sectors, covering nearly 60% of the formal services economy. However, a composite headline index has not yet been published.
Headline Index Under Preparation
Statistics Secretary Saurabh Garg said the government is working towards rolling out the headline index in the coming months, although the final timeline will depend on data readiness.
According to Garg, the ministry is evaluating whether additional sectors such as health and education should be included before launching the composite measure.
If required, the index could initially be introduced using the existing 19 sub-sectors, while efforts continue to expand its coverage beyond the current 60% of the formal services economy.
Advertisement
Filling a Key Data Gap
Unlike the manufacturing sector, which is monitored through the monthly Index of Industrial Production (IIP) and business surveys such as the Purchasing Managers' Index (PMI), India has so far lacked an official monthly indicator that captures output across the services sector.
The proposed ISP is expected to bridge this gap by offering a regular snapshot of activity in one of the country's largest contributors to economic growth.
Trial Data Signals Broad-Based Growth
The trial figures for April indicated widespread expansion across the services sector.
Of the 19 sub-sectors, 14 recorded double-digit year-on-year growth, with accommodation and food services, retail trade and administrative services emerging as the strongest performers.
Air transport was the only major segment to register a contraction during the month, while railway transport remained broadly unchanged.
Better Real-Time Economic Assessment
Garg said the new index, alongside labour, industrial and infrastructure indicators, would strengthen the government's ability to assess economic activity in real time.
Advertisement
He added that the data would also improve the compilation of quarterly national accounts and enhance the overall robustness of India's GDP estimates.