Compare and contrast the methodology and purpose of the Index of Industrial Production (IIP) and the newly introduced Index of Services Production (ISP).

Q. Compare and contrast the methodology and purpose of the Index of Industrial Production (IIP) and the newly introduced Index of Services Production (ISP). (15 marks, 250 words)

Released by MoSPI on 14 July 2026 as a trial with base year 2024-25, the ISP is conceived as the services-sector analogue of the IIP [1]. Both are high-frequency volume indices, yet they differ in coverage, data architecture and maturity.

Purpose — convergent aims, distinct gaps addressed - Shared goal: both track short-term real output for evidence-based monetary and fiscal calibration; IIP for industry, ISP for services. - Gap filled: services have exceeded 50% of GVA since 2013-14 but lacked a monthly output gauge; ISP corrects this asymmetry [2]. - Maturity contrast: IIP is an established headline indicator; ISP is at a trial, sub-sectoral stage (19 sub-sectors, ~60% of formal services), with a combined index deferred pending stability [1].

Methodology — common technique, different inputs - Similarity: both are fixed-weight Laspeyres volume indices with a fixed base period [2]. - Weights: IIP uses production-based item weights; ISP uses GVA-based sectoral weights [2]. - Data sources: IIP relies on factory returns from source agencies; ISP uses a multi-source architecture — administrative data (rail/air, banking), GST outward-supplies (trade, telecom), and the ASISSE survey (health, education) [2]. - Scope limits: ISP excludes public administration and informal services, narrowing representativeness versus IIP's fuller industrial capture [2].

Together, IIP and ISP will offer complementary real-time reads on the two largest GVA segments, strengthening India's statistical architecture. Widening ISP to informal services and launching the overall index, as MoSPI plans, would complete this convergence toward SDG-aligned, data-driven governance.

(~250 words)

Sources: 1. First Release of Sub-sectoral Trial Index of Services Production (ISP), Base Year 2024-25, PIB (14 July 2026) — trial launch, 19 sub-sectors, ~60% coverage, phased overall index 2. FAQs on Index of Services Production – Trial Indices with Base Year 2024-25, PIB — Laspeyres method, GVA weights, data sources, exclusions, services >50% of GVA