The government has put forth a proposal to utilize aggregated GST data for monitoring the services sector, aiming to enhance the ability to evaluate overall economic performance. Unlike the Index of Industrial Production (IIP), there is currently no Index of Service Production (ISP) in place to capture short-term movements within the services sector.
A Technical Advisory Committee on ISP was established in May 2025 and has drafted an Approach Paper for compiling an ISP for the formal sector after a year of discussions. This proposed approach aligns with international best practices and has been developed in collaboration with members of the TAC-ISP.
The Approach Paper delves into analyzing over forty sub-sectors of the services sector concerning data availability on output and their suitability in terms of coverage. It also addresses the availability of appropriate price deflators and methods to standardize the base of these deflators, covering key sub-sectors like wholesale and retail trade, transport, banking, insurance, communication, and more.
The Ministry of Statistics & Programme Implementation (MoSPI) has sought feedback on the proposed methodology from experts, academicians, government bodies, financial institutions, and other stakeholders by May 5, 2026. The services sector, contributing over half of India’s GDP and generating numerous jobs, is a pivotal and rapidly expanding segment of the economy.
The National Statistics Office (NSO) under MoSPI has been facing challenges in compiling the Index of Service Production, leading to a significant data gap in evaluating overall economic performance. The implementation of the Goods and Services Tax (GST) in India in July 2017 has transformed the data landscape, with monthly GST collection data now serving as a crucial indicator of economic activity.
