Release of Sub-Sectoral Trial Index of Services Production (ISP) for July 2026 (Base Year 2024–25)

1. At a Glance

• The Index of Services Production (ISP) is India's first high-frequency indicator of services-sector output. It tracks short-term changes in the volume of output of the formal services sector against a base year [4].
• It is the services counterpart of the Index of Industrial Production (IIP). The IIP measures only industrial activity and does not capture short-term trends in services [4].
• Services make up about 52.9% of GVA (2024-25) and about 30% of employment [4]. Until now, the largest sector of the economy had no monthly indicator.
• It uses GST data for statistical purposes for the first time [3][4], a major reform in data governance.

2. Why in the News

• 29 Sep 2026: MoSPI released the trial ISP for July 2026 covering 19 sub-sectors, with base year 2024–25 [1].
• July 2026 over July 2025: the highest growth was in Administrative & support services (20.9%), then Retail Trade (18.5%) and Real Estate (14.4%) [1].
• Two sub-sectors contracted: Air Transport (−8.4%) and Repair Services (−5.0%). The weakest positive growth was in Arts, Entertainment & Recreation (+1.7%) [1].
• This is the fourth monthly trial release, after the first release for April 2026 (published 14 Jul 2026) [2][6].

3. Background & Evolution

• Past attempts: NSO/MoSPI had "grappled" with compiling an ISP "for quite some time". Earlier attempts ran into major challenges because too little data was available [5].
• Why it wasn't possible earlier: limited administrative datasets, the heterogeneous and intangible nature of services, and a lack of suitable service-sector price indices [3].
• What made it possible: the GST rollout on 1 July 2017, which gives monthly outward-supply data [5], plus the launch of ASISSE [3][4].
• Milestones:
• May 2025: MoSPI set up the Technical Advisory Committee on ISP (TAC-ISP). It is chaired by Ms. Debjani Ghosh, Distinguished Fellow, NITI Aayog, and has 24 members [5][6].
• 27 Apr 2026: The Approach Paper on ISP was released for public comment. It analysed 40+ sub-sectors, and comments were due by 5 May 2026 [5].
• April 2026: ASISSE was launched [4].
• 7 Jul 2026: The TAC-ISP report was released [6].
• 14 Jul 2026: The first sub-sectoral trial ISP was released, covering April 2026 and trial indices for 2025-26 [2][4][6].
• 29 Sep 2026: The July 2026 release [1].

4. Core Static Facts

Data sources (3 pillars) [3][4]

• Administrative data: Air Transport, Railway Transport, Banking, Insurance.
• GST (aggregated) data: the other 15 sub-sectors, including trade, repair, accommodation & food, road and water transport, warehousing, postal & courier, telecom, I&B, real estate, IT, professional services, admin support, and arts & entertainment.
• ASISSE: Health and Education, excluding Government. These are to be added once ASISSE data is available.
• MoSPI receives only aggregated GST data. It neither has nor needs unit-level data [5][6].

Deflators (to convert nominal values to real volumes) [4]

• WPI: wholesale trade.
• CPI–General: repair & maintenance, banking, insurance.
• CPI–Services: sectors that have no specific CPI.
• The relevant or closest matching CPI: most other sectors.

Excluded sub-sectors [3][4]

• Public administration & defence.
• Financial services other than banking and insurance, such as central bank activities and money market funds.
• Social work without accommodation, membership organisations, personal services, and private households as employers.
• Extraterritorial organisations.
• Government health and education.
• Gambling and betting.

July 2026 snapshot [1]

• Highest index level: Accommodation & food (144.0). Lowest: Air Transport (87.8), the only index below the 100 base.
• 10 of 19 sub-sectors grew by 10% or more year-on-year.
• Railways, Banking and Insurance indices use provisional monthly data and are revised annually.

5. Multi-Dimensional Analysis

Economic

• Services have contributed over 50% of GVA since 2013-14, and about 52.9% in 2024-25. They have generated about 40 million jobs in six years [4].
• Services exports were estimated at USD 103.41 bn for Apr–Jun 2026-27, up 6.16% year-on-year [4]. The target is a 10% share of global services exports by 2047 [4].
• July 2026 data shows strong consumption (retail +18.5%, accommodation & food +12.6%) alongside weak aviation (−8.4%) [1]. The trends are uneven across sub-sectors.

Administrative / Statistical governance

• The index has to hold together three different data sources (GST, administrative data, ASISSE). The TAC calls it "a unique blend… dovetailed to meet Indian situation" [6].
• The trial phase is meant to let MoSPI test data quality and resilience and gather stakeholder feedback before regular release [1][3].
• GST-based compilation adds no extra reporting burden on businesses [6].

Ethical / Governance (data privacy, transparency)

• Using only aggregated GST data protects taxpayer confidentiality [5].
• The Approach Paper went through a public consultation in April–May 2026 [5], a participatory way to set methodology.

Technological

• The index is built on digitalised administrative data and GSTN as a source of production data [5].
• Data is shared through the eSankhyiki portal [1].

Limitations (for critical answers)

• It covers only about 60% of services, and excludes the informal sector [2][3].
• GST-exempt services (health, education, much of railways, individual life & health insurance, non-AC public transport) depend on other sources [6].
• Using CPI–General as a deflator for banking and insurance is only an approximation [4].
• Some sub-sectors are volatile month to month. Insurance, for example, went 168.1 in Mar'26 → 91.1 in May'26 [1], which points to seasonality and fiscal-year-end effects.

6. Recent Developments (last 12-18 months)

• May 2025: TAC-ISP set up under Debjani Ghosh [6].
• 27 Apr 2026: Approach Paper released for comments [5].
• Apr 2026: ASISSE launched [4].
• 7 Jul 2026: TAC-ISP report released [6].
• 14 Jul 2026: First trial ISP released (April 2026). 14 of 19 sub-sectors showed double-digit growth, and accommodation & food (37.2%) led [4].
• 29 Sep 2026: July 2026 trial ISP released [1].

7. Prelims Hooks

• ISP is compiled by NSO, MoSPI, not RBI or NITI Aayog [6].
• Base year of ISP: 2024–25 [1].
• The first trial ISP (for April 2026) was released on 14 July 2026 [4][6].
• The trial ISP covers 19 sub-sectors, about 60% of the services sector [2][4].
• ISP is a Laspeyres volume index aggregated with GVA weights at the 2-digit NIC 2025 level [6].
• TAC-ISP chair: Debjani Ghosh (Distinguished Fellow, NITI Aayog). Set up in May 2025 with 24 members [5][6].
• GST data is used for statistical applications for the first time in ISP [3][4].
• ASISSE stands for Annual Survey of Incorporated Services Sector Enterprises. It was launched in April 2026 and will cover Health and Education [3][4].
• Release lag is about 60 days, on the 29th of each month [4].
• The WPI deflates wholesale trade. CPI–General deflates banking, insurance and repair [4].
• International reference: OECD Compilation Manual for ISP (2007) [4].
• Similar indices abroad: the UK's Monthly Index of Services and South Korea's Service Industry Activity Index [4].
• July 2026: Air Transport −8.4% and Repair −5.0% contracted. Administrative & support services +20.9% grew the most [1].
• Services share of GVA in 2024-25: about 52.9% [4].

8. What the Index Cannot See: Small Shops and One-Third of Services

• Small service businesses are left out by law, not by choice
• ISP counts only businesses that file GST returns [3].
• A service business with yearly turnover below ₹20 lakh does not have to register for GST. In Manipur, Mizoram, Nagaland and Tripura the limit is ₹10 lakh [8].

• So the barber, the tuition teacher and the roadside repair shop never enter the index.

• About one-third of services output is outside ISP

• Public administration, the central bank, personal services, household workers and ownership of dwellings (the value of living in your own house) are excluded [8].
• Together, these excluded parts make up nearly 33% of services GVA [8].

• A "services growth" headline from ISP therefore describes the formal, taxed part of services, not the whole sector.

• Formalisation (small firms joining the tax system) can look like growth

• ISP uses a "universe approach". It counts all GST filers, not a fixed group of firms chosen in the base year the way IIP does [8].
• The committee chose this so the index adjusts when firms open, close or change [8].
• The other side: when an old, unregistered shop registers for GST, its sales enter the index for the first time. The index cannot tell this new reporting apart from new production.

• So strong growth in trade-heavy sub-sectors should be read with this in mind.

• A monthly informal-sector index is not possible yet

• The TAC says informal units keep no proper accounts, are small and scattered, and often change location or activity [8].
• ASUSE (Annual Survey of Unincorporated Sector Enterprises), run since 2021-22, plans quarterly estimates. But these will be in current prices, so they will still not show real volume [8].

9. Why the Price Correction Is the Weakest Link

• The right price index exists for only a few services
• A deflator removes price rise from sales figures, so only the change in real output is left [3].
• The OECD standard is the SPPI (Service Producer Price Index: the price a service firm actually receives) [3].
• In India, SPPIs exist for only five ISP sub-sectors: Air, Railways, Telecom, Banking and Insurance [3].

• Even these come out every quarter, about 55 days late. That is too slow for a monthly index [8].

• Most sub-sectors use a general consumer price instead

• Where no CPI for that specific sector exists, ISP uses CPI Non-Food [3][8]. (The note's "CPI–Services" label should be read as this.)
• The case for it: services make up about 28% of the CPI weight and about 44% of the non-food weight. More than 80% of non-food inflation comes from services or their costs, such as rent, power and fuel [3].

• The risk: petrol or electricity prices can move for reasons that have nothing to do with, say, a consultancy's fees. If the deflator is wrong, the "real growth" figure is wrong by the same amount.

• The CPI shortcut only works if GST rates stay the same

• CPI prices include GST. SPPI prices do not [8].
• The committee accepted CPI because GST rates for services have been "constant for a considerably long period" [8].

• If the GST rate on a service changes, the CPI jumps even though the producer's price did not. Real output for that month will then look lower than it really is.

• The weights are temporary

• Inside each broad sub-sector, the 2-digit industries are weighted by their GST sales, not by value added [8].
• Proper value-added weights will come from ASISSE, but its results may take more than a year [8].
• Sales-based weights give too much importance to high-turnover, low-margin activity like trade.

10. How to Read One Month's ISP Number

• Air and Rail figures count things; the rest count deflated sales
• Only Air Transport and Railways are measured in physical units, such as passenger-kilometres (the number of passengers times the distance each travelled) [3].
• So Air Transport's −8.4% in July 2026 [1] is a real fall in travel. It is not affected by any price correction.

• A +18.5% retail figure [1] is sales divided by a CPI. It includes any error in that deflator.

• Some GST categories swing a lot by nature

• The TAC itself found GST data for some categories "very volatile". It suggested grouping them together after study [8].

• A single month's double-digit jump in a small sub-sector is weak evidence on its own. Look at three or more months together.

• Banking and Insurance mix monthly and quarterly data

• Their income data comes partly each month and partly each quarter [8].

• Their monthly index is therefore partly an estimate. It is revised once the full data arrives [1].

• "Trial" means the method can still change

• The TAC called the index experimental because of "present limitations in data availability, sectoral coverage, deflators, and weighting structures" [8].
• Growth rates from the trial series may be recalculated once better deflators or weights come in. Do not treat them as final like GDP numbers.

11. Who Must Act Before This Becomes a Regular Index

• Is a partial index better than none? The committee says yes, with a condition
• The TAC concluded that releasing ISP on a trial basis "was more appropriate than continuing without an ISP" [8].
• That is fair: before this, services, at 52.9% of GVA, had no monthly measure at all [4].

• But the condition is that the trial period is used to fix the known weak points below. It should not simply become permanent.

• DPIIT: build SPPIs for all major services, and make them monthly

• The TAC asked DPIIT to intensify SPPI work so that ISP depends less on CPI and WPI [8].

• This would also make India's ISP comparable with the OECD method [3][8].

• MoSPI: test the deflator choice openly

• The TAC asked MoSPI to build quarterly ISPs for Telecom, Banking and Insurance twice, once with CPI and once with SPPI, and to check the gap between them [8].

• Publishing this gap would show users how much trust to place in the CPI-based numbers.

• Line ministries: report monthly data

• The TAC found data gaps across sectors such as civil aviation, posts, shipping and road transport. It asked the ministries concerned to set up monthly reporting systems [8].

• Informal services: use the method already built for industry

• The TAC asked that the method for an unincorporated (informal) sector index from the TAC on IIP be used for services as well [8].

• Until then, ISP should always be quoted as a formal-sector index.

• Digital economy: still pending

• Measuring the digital economy was part of the TAC's terms of reference. It was left for a separate report because it needs its own framework [8].

12. Anchors for Answers

• Data: Sub-sectors excluded from ISP make up nearly 33% of services GVA [8]. Only 5 ISP sub-sectors have an SPPI [3].
• Data: GST registration is not required below ₹20 lakh turnover (₹10 lakh in four North-Eastern states), so these units are outside ISP [8].
• Report/Committee: Report of the Technical Advisory Committee on ISP (chair Debjani Ghosh, submitted 1 July 2026) [8]. Sub-committee on Methodological Improvement for GDP base year 2022-23, which recommended CPI-General for banking and insurance [3].
• Comparison: The OECD standard prefers SPPIs as deflators and falls back on CPI only when no SPPI exists. India uses CPI for most sub-sectors because its SPPIs are few, quarterly and late [3][8].
• Scheme: ASISSE (weights and health/education data) and ASUSE (informal-sector GVA since 2021-22, quarterly estimates planned) are the two surveys meant to fill ISP's gaps [8].

13. Mains Relevance

• GS-III: Indian Economy – growth, development and employment; mobilisation of resources; effects of liberalisation (tertiary sector); inclusive growth.
• GS-II (secondary): Government policies and interventions; transparency and accountability, including institutional reform of the statistical system.
• Possible question stems: 1. The absence of a high-frequency services indicator was a critical gap in India's statistical architecture. Critically examine how the Index of Services Production addresses this gap and what limitations remain. 2. Discuss the potential and challenges of using GST data for official statistics in India, with reference to the Index of Services Production. 3. Services contribute more than half of India's GVA but a much smaller share of employment. How can better sectoral measurement help policy for jobs-led services growth?

14. Related Topics to Study Next

• Index of Industrial Production (IIP): the industrial counterpart that ISP is meant to complement [4].
• New CPI series (2024 base): base-year alignment, and CPI deflators used in ISP [4].
• WPI: the deflator for wholesale trade [4].
• ASISSE: a new survey that will feed Health and Education into ISP [3].
• GST and GSTN: the main data source for 15 of the 19 sub-sectors [3].
• GDP/GVA base revision and National Accounts: ISP is intended to improve national accounts estimation [4].
• NIC 2025: the classification used for compiling the index [6].
• Services exports and the Viksit Bharat 2047 target: a 10% global services share target [4].

15. Common Errors / Trap Areas

• Chair confusion: the TAC-ISP is chaired by Debjani Ghosh (NITI Aayog Distinguished Fellow), but the index is compiled by MoSPI/NSO, not NITI Aayog [6].
• Base year: the ISP base is 2024–25, a financial year. Don't confuse it with the CPI's calendar-year 2024 base or the IIP's older base [4].
• Coverage: ISP covers only the formal sector, about 60% of services. It excludes public administration, defence and government health/education [2][3].
• Health and Education are not in the current 19 sub-sectors. They come in later via ASISSE, not GST, because they are GST-exempt [3][6].
• Data sources: Railways, Air, Banking and Insurance use administrative data, not GST. Railways, Banking and Insurance indices are provisional and revised annually [1][3].