India to launch services production index and finance ministry to meet lenders on July 13 to boost foreign currency inflows

Services are intangible and often consumed as soon as they are produced, making output difficult to measure.SummaryThe index of services production is intended to complement the index of industrial production by providing high-frequency information on the services economy, enabling better policy decisions and economic forecasting.Gift this articleCheck your wealthThis is a Mint Premium article gifted to you.Subscribe to enjoy similar stories.

India is set to fill one of the biggest gaps in its economic statistics with the launch of the Index of Services Production (ISP), a monthly indicator that will track activity in the country’s largest economic sector.

The ministry of statistics and programme implementation (MoSPI) will release the trial series on 14 July 2026, providing a high-frequency measure of output in the formal services sector.

The move comes as services contribute more than 53% of India’s gross value added (GVA) and have become the principal driver of growth, investment and exports. Designed as the services sector counterpart of the index of industrial production (IIP), the ISP aims to provide policymakers, businesses and investors with a timely barometer of economic activity while strengthening India’s statistical system. Mint explains why India is launching the index and what it means for the economy:

India’s economy has steadily shifted from manufacturing to services, but there was no monthly indicator to track activity in the sector. Instead, they have relied on indirect proxies such as goods and services tax (GST) collections, purchasing managers' index (PMI) and bank credit.

The main challenge was that services are intangible and often consumed as soon as they are produced, making output difficult to measure. India also lacked high-frequency administrative datasets and suitable price indices to estimate real output.

That changed with the rollout of GST, digitization of government databases and the launch of the Annual Survey of Incorporated Services Sector Enterprises (ASISSE). Together, these have created a robust data ecosystem that makes monthly measurement of services production feasible.

The ISP is intended to complement the IIP by providing high-frequency information on the services economy, enabling better policy decisions and economic forecasting.

“A reliable indicator of production of services would fill up a critical information gap in understanding the profile of ongoing economic activities of the economy on a high frequency basis,” said D.K. Srivastava, chief policy advisor, EY India.

“The importance of services sector in the Indian economy is well recognised in terms of its contribution to the overall output and growth. Such an index will be highly useful for understanding the variation in the ongoing economic activities and for short-term forecasting as also in estimating the quarterly services sector GVA,” Srivastava added.

The ISP is a volume index that measures changes in the real output of service-producing industries rather than in revenues.

With 2024-25 as the base year, it will initially cover the formal services sector, including wholesale and retail trade, transport, banking, insurance, telecommunications, hotels and restaurants, real estate, information technology, professional services, administrative support services and arts and entertainment.

Health and education services provided by private institutions will be incorporated later using data from ASISSE.

The Technical Advisory Committee (TAC) has recommended compiling the index at the 2-digit NIC 2025 level using a Laspeyres volume index and GVA-based weights, ensuring sectors with larger economic contributions receive greater weight.

Initially, MoSPI will publish both the overall index and sectoral indices on a trial basis before launching the regular series.