Govt to launch Index of Service Production using GST data to track formal services
Synopsis
India is about to get its first real-time services-sector tracker. By leveraging GST data, the government is closing a decade-long measurement gap that has left policymakers flying half-blind on services — the half of the economy that actually matters most. The ISP, due by year-end, signals a shift toward granular, tech-enabled economic surveillance.
Key Takeaways
The Ministry of Statistics & Programme Implementation proposed an Index of Service Production (ISP) on 27 April 2026 .
The ISP will use aggregated GST data to track formal services-sector output in real time, filling a gap left by the absence of a services equivalent to the Index of Industrial Production (IIP) .
A Technical Advisory Committee analysed over 40 sub-sectors including retail, transport, banking, insurance, and hospitality.
The services sector contributes over 50% of India's GDP and generates millions of jobs.
Stakeholders have until 5 May 2026 to submit feedback on the proposed methodology.
The Government of India on Monday proposed leveraging aggregated Goods and Services Tax (GST) data to construct an Index of Service Production (ISP), filling a long-standing gap in real-time monitoring of the services sector and strengthening its ability to assess overall economic performance. Unlike the established Index of Industrial Production (IIP), no comparable metric currently exists to capture short-term movements across India's services economy, which contributes over half of national GDP.
The Technical Committee's roadmap
A Technical Advisory Committee on ISP was constituted in May 2025 and has spent the past year deliberating on methodology. The committee has now prepared an Approach Paper detailing how to compile an ISP for the formal services sector, drawing on international best practices. Importantly, the Ministry of Statistics & Programme Implementation (MoSPI) will not require access to individual unit-level GST returns — only aggregated data — preserving taxpayer confidentiality while enabling robust sectoral tracking.
Sectors under the index
The Approach Paper analyses over 40 sub-sectors within services in terms of data availability and coverage suitability. Key segments include wholesale and retail trade, transport, banking, insurance, telecommunications, hotels and restaurants, real estate, professional and scientific services, and arts and entertainment. The paper also addresses the technical challenge of selecting appropriate price deflators and standardising their bases to ensure comparability over time.
Why this matters for economic monitoring
The services sector is India's most dynamic and fastest-expanding economic segment, generating millions of jobs. The absence of a dedicated production index has created what officials describe as a critical data gap in assessing overall economic health. Since the implementation of GST on 1 July 2017, monthly collection data has emerged as a powerful real-time barometer of economic activity, and the new index will harness this monthly granularity to provide timely insights into services-sector momentum.
Stakeholder consultation underway
The Ministry of Statistics & Programme Implementation has invited views and comments from experts, academicians, Central government ministries and departments, state governments, financial institutions, and other stakeholders. The submission deadline is 5 May 2026. Once finalised, the ISP is expected to become a cornerstone of India's macroeconomic data infrastructure, complementing the IIP and providing policymakers with a more complete picture of sectoral performance.
Point of View
Yet policymakers have relied on lagged surveys and guesswork to assess sectoral health. GST data, granular and monthly, offers a rare opportunity to move from backward-looking indices to real-time pulse-taking. The catch: the index is only as good as the underlying GST compliance rate, which remains uneven across formal-sector services. If executed well, it becomes a template for data-driven governance. If rushed, it risks echoing the flaws of earlier economic indices.
NationPress
1 May 2026
Frequently Asked Questions
What is the Index of Service Production (ISP)?
The ISP is a new economic indicator proposed by the Ministry of Statistics & Programme Implementation to measure short-term output movements in India's formal services sector. It will be compiled using aggregated GST data and is designed to complement the existing Index of Industrial Production (IIP).
Why is an Index of Service Production needed?
The services sector contributes over 50% of India's GDP but lacks a dedicated production index, creating a critical data gap in real-time economic monitoring. The IIP covers industry, but no equivalent exists for services — the faster-growing segment of the economy.
How will the ISP use GST data?
The ISP will leverage aggregated Goods and Services Tax collection data, which has been filed monthly since GST implementation on 1 July 2017. The Ministry of Statistics will not access individual unit-level returns, only sector-wide aggregates, ensuring confidentiality.
Which sectors will the ISP cover?
The index will track over 40 formal services sub-sectors, including wholesale and retail trade, transport, banking, insurance, telecommunications, hotels and restaurants, real estate, professional services, and arts and entertainment.
When will the ISP be finalised?
The Ministry of Statistics is accepting stakeholder feedback until 5 May 2026. Once comments are reviewed and incorporated, the final methodology is expected to be ready for implementation by the end of 2026.
