MoSPI Releases India's First Monthly Index of Service Production (ISP): A New Basis for Monitoring the Service Sector
The Ministry of Statistics and Programme Implementation (MoSPI) has released India's first monthly Index of Service Production (ISP) on an experimental basis, with 2024-25 as the base year. It covers 19 service sub-sectors, representing approximately 60% of the service economy. Modeled on the Index of Industrial Production (IIP), this index will assess monthly economic activities in the service sector and aid in evidence-based policy formulation. The initial report for April 2026 showed double-digit growth in 14 of the 19 sub-sectors, while declines were observed in air and rail transport. MoSPI will release this index on the 29th of every month, providing timely economic indicators to the government, RBI, investors, and researchers.
The Ministry of Statistics and Programme Implementation (MoSPI) has released India's first monthly Index of Service Production (ISP) on an experimental basis, with 2024-25 set as the base year. This index provides a short-term assessment of monthly economic activities within India's formal service sector. It currently covers 19 service sub-sectors, representing approximately 60% of the country's service sector.
Significance of the Index of Service Production (ISP)
The ISP has been developed along the lines of the Index of Industrial Production (IIP) but aims to measure the output and performance of the service sector. Given that the service sector contributes more than 50% to India's Gross Value Added (GVA), this index is considered crucial for the timely monitoring of economic activities, short-term economic analysis, and evidence-based policy formulation.
Key Findings of the First Report
According to the first report based on data from April 2026, 14 out of the 19 service sub-sectors recorded double-digit annual growth. The highest growth was observed in accommodation and food services (37.2%), retail trade (30.8%), administrative and support services (28.7%), real estate (27.7%), and telecommunication services (22.8%). Conversely, declines were recorded in air transport (-13.9%) and rail transport (-0.4%).
Process of Constructing the ISP
The ISP was developed under the guidance of the Technical Advisory Committee (TAC-ISP), constituted in May 2025. Data from GST records, administrative sources (railways, banking, insurance, aviation, etc.), and the Annual Survey of Incorporated Sector Service Enterprises (ASISSE) were utilized for its computation. The consolidated use of various official sources enhances the index's reliability and accuracy.
Economic and Policy Significance
The ISP will provide a regular and timely indicator of the performance of India's service sector. It will assist the government, the Reserve Bank of India (RBI), NITI Aayog, investors, industries, and researchers in rapidly assessing economic activities, making policy decisions, and analyzing future economic trends. MoSPI plans to release it on the 29th of every month.
Significance for the UPSC Examination
Questions related to MoSPI, Gross Value Added (GVA), the service sector, IIP, economic indicators, government indices, and statistical surveys are frequently asked in the UPSC Preliminary and Main examinations. As the ISP is India's first official monthly production index for the service sector, it is a significant topic concerning both current affairs and the Indian economy.
