Index of Services Production (ISP)

About Index of Services Production (ISP)

• The Index of Services Production (ISP) aims to monitor the progress of the services sector. 
• Proposed by: It is proposed by the Ministry of Statistics and Programme Implementation (MoSPI).
  • The proposed approach has been developed in reference to international best practices and in consultation with members of the Technical Advisory Committee on ISP (TAC-ISP).
• It will complement the existing index of industrial production by offering high-frequency insights into the services economy.
• Base year: The index will adopt 2024–25 as its base year and will largely depend on data from the GST Network as a primary input.
• Coverage: It will track key service segments such as trade, transport, banking, insurance, hospitality, real estate, and professional services.
  • It also examines data availability, coverage, and appropriate price deflators in line with international best practices.
• It proposes to exclude services provided by the informal sector due to the paucity of data from the data sources under consideration.
• It also proposes a temporary exclusion of the health and education sector, which accounts for 10% of the services GVA, till results of the annual survey of incorporated service sector enterprises (ASISSE) become available.
• Why is it needed: At present, India releases two major high-frequency (monthly) economic indicators:
  • The Index of Industrial Production (IIP), which tracks monthly output in the industrial sector, including manufacturing, mining, and electricity.
  • The Consumer Price Index (CPI), which measures retail inflation and serves as the basis for the country’s headline inflation rate.
  • But, there is no Index of Service Production (ISP) to capture short-term movements in the services sector, and the unavailability of ISP created a critical data gap in assessing overall economic performance.