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

1. At a Glance

• The Index of Services Production (ISP) is a new monthly index from MoSPI. It measures the output of services sub-sectors against base year 2024–25 (=100). It is the services-sector counterpart of the IIP [1][4].
• The August 2026 release covers 19 sub-sectors, which make up about 60% of the services sector. It is still a trial (experimental) series [1][3].
• It is one of the first official uses of GST return data for statistics. It gives a high-frequency read on the largest sector of the economy [5].
• UPSC relevance: GS-III (growth, measuring the economy). It is also likely to come up in Prelims as a question on a new index, its base year and the ministry behind it.

2. Why in the News

• MoSPI released the trial ISP for August 2026 (growth over August 2025) for 19 sub-sectors, base year 2024–25 [1].
• Retail Trade grew fastest at 19.9%. Air Transport (-9.6%) and Arts, Entertainment & Recreation (-4.7%) shrank. Railway Transport (+3.7%) had the lowest positive growth [1].
• Retail Trade's index level stood at 139.2, well above the base-year level [1].
• The release follows the July 2026 ISP. In that month Wholesale Trade grew 12.1%, Retail Trade 18.5% and Air Transport -8.4% [2].

3. Background & Evolution

• Why it was needed: India had the IIP as a monthly gauge of industry, but no comparable monthly index for services, the largest sector. Services were tracked only through periodic GVA estimates [4][1].
• Milestones:
• May 2025: MoSPI set up a Technical Advisory Committee (TAC) on compilation of ISP, chaired by Ms. Debjani Ghosh (Distinguished Fellow, NITI Aayog) [6][4].
• MoSPI put out an approach paper on compiling the ISP for consultation [4].
• PIB FAQs announced that the ISP would be launched as a "new macro indicator" in July 2026 [4].
• First release: 19 sub-sectors, reference month April 2026. Later releases were scheduled for the 29th of each month [3].
• 29 Sept 2026: release for July 2026 [2].

• August 2026 release: PRID 2330036 [1].

• The wider revision of base years [7][8][10]:

• GDP: the new series uses base year 2022–23 (previously 2011–12) and was released on 27 Feb 2026 [7].
• CPI: the new base year is 2024 [8][10].
• IIP: the new base year is 2022–23 [9].

4. Core Static Facts

Item	Fact
Releasing body	Ministry of Statistics & Programme Implementation (MoSPI) [1]
Base year	2024–25 [1]
Why 2024–25	It was a "normal" year, it was the latest year with GST data when compilation began, and it matches the 2024 base of the new CPI (which supplies deflators) [6]
Coverage	19 sub-sectors, about 60% of the services sector [3]
Not yet covered	Health and Education, to be added later after the ASISSE survey results come out [3]
Overall/aggregate ISP	Not yet released; it will follow once the sub-sector series prove stable and resilient [3]
Main data source	Outward supplies in GST returns, used as a proxy for production. They are grouped by NIC code and then deflated [5]
Administrative-data sectors	Air transport, Railways, Banking & Insurance [5]
Deflators	WPI for wholesale trade, sector-specific CPI where available, general CPI for banking & insurance [5]
Formula	Fixed-weight Laspeyres volume index. Weights come from sectoral GVA in National Accounts Statistics [5]
Growth measure	Year-on-year (same month of the previous year), which removes seasonal effects [1]
Revision	Railways, Banking and Insurance indices use provisional monthly data and are revised every year [1][3]
Release schedule	29th of each month [3]
Data portal	eSankhyiki (esankhyiki.mospi.gov.in) [1]
Advisory body	TAC on ISP, chaired by Debjani Ghosh, set up in May 2025 [6]

5. Multi-Dimensional Analysis

Economic

• Retail growth of 19.9% points to strong consumption demand. The fall in air transport (-9.6%) points to stress in aviation, which may come from supply or cost factors [1].
• Strong growth in the overall figure can hide contraction in some segments. That is why the series is published sub-sector by sub-sector [1].
• A monthly services index can feed into GDP nowcasting and the RBI's reading of the economy before quarterly GVA estimates are out (analytical point).

Scientific / Technological (statistical method)

• Using GST returns for statistics is a shift from survey-based data to administrative data [5].
• The Laspeyres fixed-weight design matches IIP practice, but it can overstate growth when consumers substitute between products (standard index-number caveat) [5].
• Deflator choice matters. GST values are nominal, so a poor deflator distorts real growth [5].

Ethical / Governance

• Publishing a trial series and seeking stakeholder feedback before the regular series adds to transparency and credibility [1].
• The ISP is part of the effort to rebuild trust in official statistics, alongside the 2026 base revisions of GDP, CPI and IIP [8][7].

Administrative

• Reliance on provisional railway, banking and insurance data means annual revisions [1].
• The ISP depends on the quality of GST filings and on correct NIC classification. The informal and unregistered services segment falls below the GST threshold, so coverage of the unorganised sector is limited (analytical point) [5].
• The 60% coverage leaves out health and education, both large social sectors, for now [3].

6. Recent Developments (last 12–18 months)

• May 2025: TAC on ISP set up under Debjani Ghosh [6].
• 27 Feb 2026: new GDP series released with base year 2022–23 [7].
• 2026: CPI moved to base 2024 [8][10]; IIP moved to base 2022–23 [9].
• Mid-2026: PIB/MoSPI published FAQs on the ISP [4][5].
• April 2026 (reference month): first sub-sectoral ISP covering 19 sub-sectors [3].
• 29 Sept 2026: ISP for July 2026. Retail Trade +18.5%, Air Transport -8.4% [2].
• August 2026 ISP: Retail Trade +19.9%, Air Transport -9.6%, Arts/Entertainment -4.7%, Railways +3.7% [1].

7. Prelims Hooks

• The ISP is compiled and released by MoSPI, not the RBI, NITI Aayog or the DPIIT [1].
• The ISP base year is 2024–25. The base year of the new GDP and IIP series is 2022–23 [1][7][9].
• The new CPI base year is 2024, which partly explains why the ISP uses 2024–25 [6][8].
• The trial ISP covers 19 services sub-sectors [1].
• These 19 sub-sectors cover about 60% of the services sector [3].
• Health and Education are not yet in the ISP [3].
• Outward supplies in GST returns serve as the proxy for services production [5].
• The ISP is a fixed-weight Laspeyres volume index, with weights taken from sectoral GVA [5].
• Railways, Banking and Insurance indices use provisional data that is revised every year [1].
• The TAC on ISP was chaired by Debjani Ghosh (NITI Aayog) and set up in May 2025 [6].
• ISP data is published on the eSankhyiki portal [1].
• In August 2026, Retail Trade grew fastest (+19.9%) and Air Transport fell most (-9.6%) [1].
• An overall (aggregate) ISP has not yet been released. Only sub-sectoral indices are published [3].
• WPI deflates wholesale trade. General CPI deflates banking & insurance [5].

8. What the 19.9% Retail Number Cannot Tell You Yet

• It counts only firms that are registered under GST
• The TAC itself says that GST data, by definition, covers only entities registered with GST [6].
• Service providers below the GST threshold (the turnover limit below which a firm need not file GST returns) are left out of the index [11].

• So the 19.9% tells us how registered retailers did. It does not tell us how the small kirana shop or street vendor did.

• Growth in filings can look like growth in output

• The index adds up outward supplies (sales) reported in GST returns [5].
• Suppose more shops start filing returns, or start reporting sales they used to hide. Total reported sales will then rise even if nobody sells more goods. (This is our own reading, not an official statement.)

• The release does not yet separate these two effects. Read high retail growth as a mix of real demand and more firms joining the GST system.

• Two months of data is not yet a trend

• Retail went from +18.5% in July to +19.9% in August. Air transport went from -8.4% to -9.6% [2][1].
• The two months point the same way. But a trial series with only a few months of history cannot show whether this is a cycle or a one-off.
• Railways, banking and insurance figures will also be revised every year [1]. Do not quote them as final numbers.

9. Why the Missing 40% Is Not a Random Gap

• The parts left out are the parts hardest to measure
• MoSPI says the excluded sub-sectors are mainly those dominated by non-market activity (services given free or at token prices, like government schools) and by the informal sector (unregistered small enterprises) [5].

• So the 60% that is covered is mostly the formal, market-based part of services [3].

• Even the planned fix uses the same GST list

• Health and education are exempt from GST. So GST returns cannot measure them, and another data source is needed [11].
• MoSPI plans to use ASISSE for them [3]. But ASISSE draws its sample from the list of GSTN-registered entities [11].

• The approach paper itself says all three sources (administrative data, GST and ASISSE) leave out informal-sector services [11].

• Why this matters for an answer

• Most of India's services workers are in small, unregistered units. An index built on registered firms can show fast growth while the informal part grows slowly or shrinks.
• So when the aggregate ISP comes, it may describe formal services well and informal services hardly at all.

10. A Better Price Measure Now Exists, and the ISP Should Use It

• The ISP is using a price index that its own approach paper ranks second
• GST sales are in rupees, so they must be divided by a deflator (a price index used to remove the price rise from a money value) to get real output [5].
• MoSPI's approach paper says the preferred deflators are PPIs (Producer Price Indices, which track the prices that producers receive). CPI should be used only when no PPI exists [11].

• Yet banking and insurance are deflated using the general CPI [5], which mostly tracks household prices for food, fuel, rent and so on. It does not track bank or insurance charges.

• Service PPIs are now available

• In June 2026, along with the new WPI (base 2022–23), the government launched Service PPIs for seven services. These are banking, securities transactions, insurance, pension fund management, railways, passenger air travel and telecom [13].

• Four of these match ISP sub-sectors directly: banking, insurance, railways and air transport [13][5].

• MoSPI has already made this switch for industry

• For the IIP, MoSPI dropped WPI as the deflator and used Output PPI instead. This covers 234 of 463 item groups, about 36% of the index weight [14].

• MoSPI should do the same for the ISP before the aggregate index is released. One limit: Service PPIs come out every quarter, not every month [13]. So monthly figures would still need an estimate between releases.

• This follows the international manual India is copying

• The OECD's Compilation Manual for an Index of Services Production (2007) ranks indicators in this order: turnover deflated by a price index first, then volume measures, then input measures [12][11].
• The UK began with an experimental monthly index of services. It built it by expanding an existing index of distribution (trade) [12]. India's 'trial first, aggregate later' approach follows the same route. So the next step should be the same too: better deflators and wider coverage before the headline number is published.

11. Anchors for Answers

• Data: The trial ISP covers 19 sub-sectors, about 60% of the services sector. Health and education are not yet included [3]
• Data: Service PPIs launched in 2026 for 7 services, including banking, insurance, railways and passenger air travel. They are released quarterly [13]
• Data: IIP moved from WPI to Output PPI deflators for 234 of 463 item groups, about 36% of its weight [14]
• Report/Committee: Technical Advisory Committee on ISP, chaired by Debjani Ghosh, set up in 2025 [6]. MoSPI Approach Paper on compilation of the ISP, 2026 [11]
• Report/Committee: OECD Compilation Manual for an Index of Services Production, 2007. It ranks deflated turnover as the preferred indicator [12]
• Comparison: The UK began with an experimental monthly Index of Services built on its index of distribution. Like India, it ran the series as experimental first [12]

12. Mains Relevance

• GS-III: Indian Economy, issues relating to planning, mobilisation of resources, growth, development and employment. This covers measuring growth and the services sector.
• GS-II (secondary): Governance, transparency and accountability, through the credibility of official statistics.
• Possible question stems: 1. The services sector dominates India's GVA but has lacked a high-frequency output indicator. Discuss the significance and limitations of the newly introduced Index of Services Production. (15 marks) 2. Examine the use of GST administrative data in official statistics. What safeguards are needed to make sure such data is reliable? (10 marks) 3. The 2026 base-year revisions of GDP, CPI and IIP, together with the launch of the ISP, mark a reset of India's statistical system. Critically analyse. (15 marks)

13. Related Topics to Study Next

• IIP (new base 2022–23): the industry counterpart of the ISP, with a similar Laspeyres method.
• GDP new series (base 2022–23): the ISP feeds into the monitoring of services GVA.
• CPI (base 2024): it supplies the deflators and drove the choice of base year.
• WPI base revision: it deflates wholesale trade and is under revision.
• ASISSE (Annual Survey of Incorporated Service Sector Enterprises): health and education will join the ISP once its results are out.
• GST framework and GSTN: the main source of ISP data.
• NIC (National Industrial Classification): used to classify the GST data.
• eSankhyiki portal and the National Statistical System reforms (NSO): how data is shared and governed.

14. NCERT Concepts to Revise

• Index of Industrial Production (Economy): The ISP is the services counterpart of the IIP and uses the same Laspeyres fixed-weight method.
• Base year (Economy): The note stresses 2024–25 as the ISP base year and compares it with the other 2026 base revisions.
• Goods and Services Tax (Economy): GST returns, specifically outward supplies, are the main data source for the ISP.
• Tertiary sector (Economy): The ISP measures services, the largest sector of the economy, which has had no monthly output index.
• Consumer Price Index (Economy): CPI supplies the deflators and its 2024 base partly explains the choice of the ISP base year.

15. Common Errors / Trap Areas

• Mixing up base years: ISP 2024–25; GDP and IIP 2022–23; CPI 2024. These are four different bases.
• Thinking an overall ISP exists: only 19 sub-sectoral indices are published, and the aggregate will come later [3].
• Wrong ministry or agency: the ISP is from MoSPI. The TAC chair is from NITI Aayog, but NITI Aayog does not release the index [6].
• Confusing index level with growth: a level of 139.2 is not growth of 39.2% over last year. It is relative to the base year. Growth is measured year-on-year [1].
• Thinking all sectors use GST data: air transport, railways, banking and insurance use administrative data [5].