UPSC Prelims Practice Questions — An Approach Paper to Compilation of the Index of Service Production (ISP) for the formal sector of the economy

Q1. With reference to the proposed Index of Service Production (ISP) vis-à-vis the existing Index of Industrial Production (IIP), consider the following statements:

1. The IIP is currently compiled and released by the National Statistical Office, MoSPI, whereas the ISP has not yet been operationalised and is at the approach-paper stage.
2. While the IIP covers mining, manufacturing and electricity, the ISP is proposed to cover the formal services sector using aggregated Goods and Services Tax data as its primary source.
3. The ISP approach paper proposes to access individual unit-level GSTN returns to compile the index, similar to the unit-level data used for the IIP.

• A. 1 and 2 only
• B. 1 only
• C. 2 and 3 only
• D. 1, 2 and 3

Q2. The term 'Index of Service Production (ISP)', recently seen in the news, is best described as which one of the following?

• A. A high-frequency index proposed by the National Statistical Office, MoSPI, to capture short-term movements in India's formal services sector, analogous to the Index of Industrial Production.
• B. A composite index released by the Reserve Bank of India to track quarterly credit off-take to the services sector of the economy.
• C. A World Trade Organization benchmark index measuring cross-border trade in commercial services across member economies.
• D. An OECD productivity indicator that compares output per worker in the services sector among member countries.

Q3. With reference to the Approach Paper on the Index of Service Production (ISP) released by MoSPI, consider the following sub-sectors. Which of the above are NOT listed among the key sub-sectors proposed for coverage under the ISP?

1. Banking and insurance
2. Public administration and defence
3. Wholesale and retail trade
4. Agriculture, forestry and fishing

• A. 1 and 3 only
• B. 2 and 4 only
• C. 1, 2 and 4 only
• D. 3 only

Q4. With reference to the Approach Paper on Compilation of the Index of Service Production (ISP) released by the Ministry of Statistics and Programme Implementation in April 2026, consider the following statements:

1. The Technical Advisory Committee on ISP (TAC-ISP) that finalised the Approach Paper was constituted in May 2025 with twenty-four members, while the existing Index of Industrial Production (IIP) uses 2011-12 as its base year.
2. Unlike the IIP which covers Mining, Manufacturing and Electricity, the proposed ISP will draw on unit-level GSTN returns of individual taxpayers as its core data source.
3. The Approach Paper analyses more than forty sub-sectors of the services sector, including wholesale and retail trade, banking, insurance and real estate.

• A. 1 and 2 only
• B. 1 and 3 only
• C. 2 and 3 only
• D. 1, 2 and 3

Q5. As per the Approach Paper on Compilation of the Index of Service Production (ISP) released by MoSPI in April 2026, which one of the following is proposed as the PRIMARY data source for compiling the index for the formal sector?

• A. Aggregated Goods and Services Tax Network (GSTN) data
• B. Annual Survey of Services Sector Enterprises conducted by NSO
• C. Sectoral deployment of bank credit data published by the Reserve Bank of India
• D. Producer Price Index series maintained by the Office of the Economic Adviser

Q6. The Approach Paper on Compilation of the Index of Service Production (ISP) for the formal sector, released in April 2026, has been prepared under the aegis of which one of the following bodies?

• A. Technical Advisory Committee on ISP constituted by the National Statistical Office, MoSPI
• B. National Statistical Commission
• C. Economic Advisory Council to the Prime Minister
• D. Standing Committee on Economic Statistics under NITI Aayog

Q7. With reference to the proposed Index of Service Production (ISP), what is the 'Goods and Services Tax Network (GSTN)'?

• A. A statutory regulatory authority under the Ministry of Finance that frames GST policy and rates
• B. A not-for-profit, non-government company that provides the shared IT infrastructure and services to the Central and State Governments, taxpayers and other stakeholders for implementation of GST
• C. A constitutional body chaired by the Union Finance Minister that recommends GST rates to the Centre and States
• D. The unique 15-digit alphanumeric identification number issued to every taxpayer registered under GST

Q8. With reference to the proposed Index of Service Production (ISP) and the existing Index of Industrial Production (IIP), consider the following statements: 1. Both indices are proposed/compiled by the National Statistical Office under MoSPI as high-frequency (monthly) indicators. 2. Unlike the IIP, which is built from unit-level data collected from factories, the proposed ISP relies on aggregated GST data without accessing individual unit-level information. 3. The proposed ISP, in its first phase, will cover both the formal and the informal segments of the services sector, whereas the IIP is restricted to the formal industrial sector. Which of the statements given above is/are correct?

1. Both indices are proposed/compiled by the National Statistical Office under MoSPI as high-frequency (monthly) indicators.
2. Unlike the IIP, which is built from unit-level data collected from factories, the proposed ISP relies on aggregated GST data without accessing individual unit-level information.
3. The proposed ISP, in its first phase, will cover both the formal and the informal segments of the services sector, whereas the IIP is restricted to the formal industrial sector.

• A. 1 and 2 only
• B. 2 and 3 only
• C. 1 and 3 only
• D. 1, 2 and 3

Q9. The Approach Paper to the compilation of the Index of Service Production (ISP) for the formal sector of the economy has been prepared by which one of the following?

• A. Central Board of Indirect Taxes and Customs (CBIC), Department of Revenue, Ministry of Finance
• B. National Statistical Office (NSO), Ministry of Statistics and Programme Implementation
• C. Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry
• D. Economic Advisory Council to the Prime Minister (EAC-PM), NITI Aayog

Q10. How many broad sectors are covered under the Index of Industrial Production (IIP) with base year 2011-12 in India?

• A. Two
• B. Three
• C. Four
• D. Six

Q11. What is the current base year of the Index of Industrial Production (IIP) released by the National Statistical Office, MoSPI?

• A. 1993-94
• B. 2004-05
• C. 2011-12
• D. 2017-18

Q12. In the context of the Index of Industrial Production (IIP), the term 'use-based classification' refers to:

• A. Classification of industrial items by sector of origin, namely mining, manufacturing and electricity
• B. Grouping of industrial items by their economic end-use into categories such as primary, capital, intermediate, infrastructure/construction, consumer durables and consumer non-durables
• C. Classification of industries by ownership pattern as public sector, private sector and joint sector enterprises
• D. Grouping of items by the National Industrial Classification (NIC) 2-digit codes for industrial divisions

Q13. With reference to the Approach Paper on the Index of Service Production (ISP), 2026, consider the following economic activities. Which of the following are NOT listed among the sub-sectors proposed to be covered under the ISP for the formal sector?

1. Wholesale and retail trade
2. Construction
3. Insurance
4. Mining and quarrying

• A. 1 and 3 only
• B. 2 and 4 only
• C. 1, 2 and 4
• D. 3 only

Q14. With reference to the Approach Paper on the Index of Service Production (ISP), 2026, which of the following are explicitly identified as sub-sectors of the services economy proposed to be covered under the ISP?

1. Communication
2. Manufacture of textiles
3. Hotels and restaurants
4. Crop production and animal husbandry

• A. 1 and 3 only
• B. 2 and 4 only
• C. 1, 3 and 4
• D. 1, 2 and 3

Q15. The Technical Advisory Committee on the Index of Service Production (TAC-ISP), which finalised the 2026 Approach Paper on ISP for the formal sector, was constituted by which one of the following?

• A. Reserve Bank of India
• B. NITI Aayog
• C. National Statistical Office under the Ministry of Statistics and Programme Implementation
• D. National Statistical Commission

Q16. In India, the official estimates of the contribution of the services sector to Gross Domestic Product (GDP) and Gross Value Added (GVA) are compiled and released by which one of the following?

• A. Reserve Bank of India, Department of Economic and Policy Research
• B. National Statistical Office, Ministry of Statistics and Programme Implementation
• C. NITI Aayog, Development Monitoring and Evaluation Office
• D. Department for Promotion of Industry and Internal Trade, Ministry of Commerce and Industry

Q17. As per the First Advance Estimates of National Income for the financial year 2025-26, which one of the following sectors had the largest share in India's Gross Value Added (GVA) at basic prices?

• A. Agriculture and allied activities
• B. Manufacturing
• C. Services
• D. Industry (including Mining, Manufacturing, Electricity and Construction)

Q18. Match List I (Reference period) with List II (Share of services sector in the Indian economy, as per official estimates) and select the correct answer using the code given below the Lists:

• A. A-1, B-2, C-3, D-4
• B. A-2, B-1, C-4, D-3
• C. A-1, B-2, C-4, D-3
• D. A-3, B-2, C-1, D-4

Q19. In the Index of Industrial Production (IIP) with base year 2011-12 released by the NSO, which one of the following sectors has the highest weight?

• A. Mining
• B. Manufacturing
• C. Electricity
• D. Construction

Q20. With reference to the Annual Survey of Unincorporated Sector Enterprises (ASUSE) conducted by the MoSPI, which one of the following best describes what it measures?

• A. Output and value added of registered factories employing ten or more workers with the use of power
• B. Quarterly estimates of employment in nine selected non-farm sectors of the formal economy
• C. Economic and operational characteristics of unincorporated non-agricultural establishments in manufacturing, trade and other services, excluding construction
• D. Price movements at the first point of bulk sale of commodities in the domestic market

Q21. Match List I with List II and select the correct answer using the code given below the Lists:

• A. A-3, B-2, C-1, D-4
• B. A-2, B-3, C-4, D-1
• C. A-3, B-1, C-2, D-4
• D. A-4, B-2, C-1, D-3