Index of Services Production (ISP)
Context: National Statistics Office under the Ministry of Statistics & Program Implementation has released Index of Services Production for 19 Services Sector account for approx. 60% of India's overall India's services output.
About Index of Services Production (ISP)
Released by: National Statistics Office (NSO), MoSPI
Base Year: 2024-25
Frequency: Monthly (Released with a 60 day lag)
What Index of Services Production Measures
Measures: Short-term changes in the real (inflation-adjusted) volume of formal services output.
Does NOT Measure: Gross Value Added (GVA), services-sector GDP, business sentiment, or informal service activity.
ISP vs. IIP: ISP does for services what the Index of Industrial Production (IIP) does for manufacturing, mining, and electricity.
ISP vs. PMI: ISP is based on actual administrative data (realized output), whereas the Purchasing Managers' Index (PMI) is a survey-based indicator of business sentiment.
Coverage & Weights
The current trial ISP covers 19 formal-service subsectors, representing roughly 60% of India’s total services sector.
Top Heavy: Just five sectors account for over 72% of the total index weight.
Highest Weight: IT and computer-related services (22.47%).
Other Top Sectors: Retail trade, Administrative and support services, Banking, and Road transport.
Composite Index: MoSPI is currently releasing individual subsector indices but has deferred the release of an official composite (overall) ISP until the data stabilizes.
Methodology & Data Sources
Primary Data: Relies heavily on GST returns (GSTR-1 outward supplies), administrative data (for railways, aviation, banking), and the Annual Survey of Incorporated Services Sector Enterprises (ASISSE).
Universe Approach: Unlike the IIP’s fixed-panel approach, the ISP tracks the dynamic universe of GST-registered enterprises, automatically capturing new registrations and closures.
Deflation Mechanism: Because India lacks comprehensive monthly Services Producer Price Indices (SPPIs), the ISP relies heavily on standard CPI and WPI to adjust nominal turnover into real output.
ISP currently excludes:
Health and Education: Temporarily excluded due to GST exemptions and a lack of reliable monthly output data.
Ownership of Dwellings: Temporarily excluded as it is an imputed service without observable monthly data.
Public Administration & Defense: Structurally excluded.
Informal Economy: The vast unregistered services sector (street vendors, small eateries, informal transport, domestic workers) is entirely excluded from this index.
Central Banking: Excluded, though standard banking and insurance are covered.
