MoSPI proposes Index of Service Production with 2024-25 as base year

The Ministry of Statistics and Programme Implementation (MoSPI), through its National Statistics Office (NSO), proposed a new Index of Service Production (IS...

What Happened

The Ministry of Statistics and Programme Implementation (MoSPI), through its National Statistics Office (NSO), proposed a new Index of Service Production (ISP) with 2024–25 as the base year to measure monthly output in India's formal services sector.
The ISP will use Goods and Services Tax (GST) data as its primary data source — leveraging monthly outward supply returns from the GSTN portal as turnover proxies for market-oriented service sub-sectors.
Sectors to be covered include wholesale and retail trade, road and water transport, accommodation and hospitality, IT and consulting services, real estate, banking, insurance, communication, and professional services.
The ISP is designed to complement the Index of Industrial Production (IIP) by providing equivalent high-frequency tracking for the services economy — the sector contributing over 50% of India's Gross Value Added (GVA).
MoSPI invited comments from stakeholders — including central ministries, state governments, academic institutions, and financial sector bodies — by May 5, 2026, before finalising the methodology.
A supplementary data source, the Annual Survey of Incorporated Services Sector Enterprises (ASISSE), scheduled to commence from 2026, will cover GST-exempt sectors like health and education in later phases.

Static Topic Bridges

Index of Industrial Production (IIP) — Methodology and Limitations

The Index of Industrial Production (IIP) is a composite monthly indicator compiled and published by the National Statistics Office (NSO), Ministry of Statistics and Programme Implementation, with a six-week lag from the reference month. It measures short-term changes in the volume of production in a selected basket of industrial products (manufacturing, mining, electricity), using 2011–12 as the base year (revised from earlier base years — the index has used bases of 1937, 1946, 1951, 1956, 1960, 1970, 1980–81, 1993–94, 2004–05, and 2011–12 successively). The IIP is computed as a weighted arithmetic average using the Laspeyres formula.

IIP coverage: Manufacturing (77.6% weight), Mining (14.4%), Electricity (8.0%).
IIP explicitly excludes: Services sector and the informal/unorganised economy.
Use-based classification in IIP: Primary Goods, Capital Goods, Intermediate Goods, Infrastructure/Construction Goods, Consumer Durables, Consumer Non-Durables.
IIP is a leading indicator used for Advance Estimates of GDP, industrial output assessment, and monetary policy calibration.
Key limitation: As services constitute over 50% of India's economy, the absence of a services production index creates a significant measurement gap in high-frequency economic tracking.

Connection to this news: The ISP is a direct response to the IIP's structural blind spot — the inability to track real-time services output. Together, IIP and ISP would provide comprehensive coverage of the formal economy's output dynamics on a monthly basis.

GST as a Statistical Data Source

The Goods and Services Tax Network (GSTN) collects monthly return data from registered taxpayers, making GST returns one of the richest real-time economic datasets available in India. This administrative data covers market transactions across most service categories, giving statisticians access to turnover-level data without the lag inherent in surveys.

GSTR-1 (outward supplies): Filed monthly or quarterly by suppliers; captures invoice-level transaction data.
GSTR-3B (summary return): Monthly summary of tax liability; provides aggregate turnover data.
GST base (as of 2025): Over 1.4 crore active GST registrations; monthly GST collections routinely exceed ₹1.7 lakh crore.
Limitation: GST data covers only the formal, taxable services sector — GST-exempt sectors (health, education, social services) and the informal economy are excluded.
First use of GST data at this scale in official statistics: The ISP proposal marks a significant methodological shift toward administrative data sources over traditional surveys.

Connection to this news: The use of GST data for the ISP reduces the time lag compared to enterprise surveys, enables monthly frequency, and improves geographic coverage — making the index more actionable for policymakers and analysts.

National Statistical Office (NSO) and India's Official Statistics Architecture

The National Statistics Office (NSO) was formed in May 2019 by merging the Central Statistics Office (CSO) and the National Sample Survey Office (NSSO). It functions under MoSPI and is responsible for national accounts (GDP estimates), price indices (CPI, WPI through respective ministries), IIP, and large-scale household surveys (PLFS, HCES, NSS).

MoSPI mandate: Formulation of statistical policies, coordination among statistical agencies, maintaining standards via the Statistical Standards Advisory Committee, and publishing official data.
Key indices published by NSO/MoSPI: IIP, CPI, National Accounts (GDP/GVA), Annual Survey of Industries (ASI), Periodic Labour Force Survey (PLFS).
ASISSE: Annual Survey of Incorporated Services Sector Enterprises — a new survey proposed to capture incorporated services entities, complementing the existing ASI (manufacturing-focused).
Nominal vs. real output in services: Deflating nominal GST-based turnover to arrive at real output volumes is a methodological challenge — price indices for services sub-sectors are less developed than for goods.

Connection to this news: The ISP is a flagship initiative under MoSPI's broader mandate to modernise India's statistical infrastructure, bringing services measurement on par with goods measurement and supporting more accurate GDP estimation.

Services Sector and India's GVA — Structural Context

India's services sector — encompassing trade, transport, finance, real estate, professional services, public administration, education, and health — has contributed over 50% of Gross Value Added (GVA) since the early 2000s and is the largest employer in the organised sector. Despite its dominance, high-frequency data on services output has historically been limited to quarterly GDP estimates and annual surveys, with a significant time lag.

Services share of GVA (2024–25): Approximately 54–55%.
Services share of employment: Services account for a rising share of non-agricultural employment, particularly in trade, transport, and IT.
India's services exports: Over $300 billion annually, driven by IT/ITES, business process management, and financial services.
Services inflation drivers: Healthcare, education, rents, and financial services are key components of Core CPI — better output tracking supports more precise inflation analysis.
Sectors initially excluded from ISP: Health, education (GST-exempt); large parts of informal services (unregistered vendors, small traders).

Connection to this news: The ISP addresses a long-standing data gap, providing policymakers with real-time output signals for the sector that drives the majority of India's economic growth — enabling better fiscal, monetary, and investment planning.

Key Facts & Data

Proposed index name: Index of Service Production (ISP).
Proposed base year: 2024–25.
Primary data source: GST outward supply returns (GSTN data).
Target coverage: ~70% of services sector GVA.
Frequency: Monthly.
Sectors covered: Wholesale and retail trade, transport, banking, insurance, communication, hospitality, real estate, IT, professional services, entertainment.
Excluded sectors (Phase 1): Health, education (GST-exempt); informal economy.
Supplementary survey: ASISSE (Annual Survey of Incorporated Services Sector Enterprises), commencing 2026.
Stakeholder comment deadline: May 5, 2026.
IIP base year (current): 2011–12.
Services share of India's GVA: Over 50%.
IIP computed by: National Statistics Office (NSO), MoSPI; six-week lag.
ISP rationale: Complement IIP to provide full-economy high-frequency tracking; services hitherto absent from monthly production indices.