The Ministry of Statistics and Programme Implementation (MoSPI) released the trial Index of Services Production (ISP) for June 2026 on 31 August 2026, giving India its first monthly volume measure of the formal services sector. The trial index covers 19 sub-sectors with 2024-25 as the base year and tracks about 60% of services activity. Real estate emerged as the fastest growing sub-sector in June with 24.7% year on year growth, while 18 of the 19 sub-sectors recorded positive growth.
What Is the Index of Services Production?
The Index of Services Production (ISP) is a short term indicator that measures month to month change in the volume of services produced in India compared to a base year. The service sector, also called the tertiary sector, covers activities where value comes from providing a service rather than making a good or growing a crop. It includes trade, transport, hotels, communications, banking, insurance, real estate, information technology and professional services.
The ISP is compiled by the National Statistical Office (NSO) under the Ministry of Statistics and Programme Implementation (MoSPI). MoSPI is the nodal ministry for official statistics in India and the NSO is its statistical arm that releases national accounts, price indices and industrial output data. The ISP covers only the formal sector, which means registered enterprises whose transactions are recorded in tax and administrative systems. It does not cover government administration and defence, non market services and most informal units.
This matters because services are the largest part of the Indian economy. Services account for nearly 55% of Gross Value Added (GVA) in 2024-25 and about 30% of total employment. GVA is the value of goods and services produced in an area minus the cost of inputs used to produce them. Until now, India had no monthly production index for this dominant sector. The ISP fills that gap and completes the suite of high frequency macro indicators alongside industrial output and price indices.
19 Sub-Sectors Covered Under the Trial Index
The current trial series covers 19 sub-sectors that together represent about 60% of services activity. The classification follows the National Industrial Classification (NIC) 2025, where services span Sections G to V. The list includes trade and repair, hospitality, all four modes of transport with warehousing support, communications, finance, property and knowledge services.
The 19 sub-sectors are wholesale trade, retail trade, repair and maintenance services, accommodation and food services, railway transport, road transport, water transport, air transport, warehousing and support activities for transportation, postal and courier services, telecommunications, information and broadcasting, banking, insurance, real estate, IT and computer related services, professional scientific and technical services including research and development, administrative and support services, and arts entertainment and recreation services.
Health, education and ownership of dwellings are not yet included. These services are either exempt from the Goods and Services Tax (GST) or dominated by government and non market provision, so they cannot be tracked through monthly tax data. MoSPI plans to add them later using the Annual Survey of Incorporated Services Sector Enterprises (ASISSE), which will take coverage to 80% to 90% of the formal services sector.
How June 2026 Performed Across Sub-Sectors
The June 2026 release is the third trial print. The first trial release for April 2026 was published on 14 July 2026, when 14 of the 19 sub-sectors recorded double digit growth. In June, growth was still broad but more moderate. Eight sub-sectors recorded double digit year on year growth and 18 of the 19 recorded positive growth. Only air transport contracted.
| Sub-sector | ISP index in June 2026 | Year on year growth |
|---|---|---|
| Real estate | 119.0 | 24.7% |
| Retail trade | 138.0 | 18.0% |
| Wholesale trade | 122.8 | 15.1% |
| Administrative and support services | 121.7 | 14.4% |
| IT and computer related services | 130.8 | 13.5% |
| Warehousing and support activities | 128.3 | 11.8% |
| Banking | 121.3 | 11.4% |
| Accommodation and food services | 141.2 | 10.2% |
| Telecommunications | 118.1 | 9.5% |
| Air transport | 91.2 | minus 6.0% |
An index value above 100 means activity is higher than the average monthly level in the base year 2024-25. For example, retail trade at 138.0 means activity was 38% higher than the base year average. The growth rate compares June 2026 with June 2025, not with the base year. Real estate improved sharply from 17.7% growth in May to lead the table in June, followed by distribution trades and business services.
ISP vs IIP: How Services Measurement Differs From Industrial Measurement
The Index of Industrial Production (IIP) is the closest parallel to the new ISP. The IIP is a monthly volume index for industry compiled by the NSO with base year 2011-12. It covers mining, manufacturing and electricity across 839 items grouped into 407 item groups, with weights of 14.37% for mining, 77.63% for manufacturing and 7.99% for electricity. It is released every month as a quick estimate with a lag of about 42 days.
The ISP is designed as the services counterpart of the IIP, but the method is different because services cannot be counted in physical units like tonnes of steel or kilowatt hours. The ISP therefore tracks the value of output and then removes price change to arrive at volume. It uses a Laspeyres volume index, which is a fixed weight formula that compares current output with base year output using base year shares as weights. Aggregation uses Gross Value Added (GVA) weights at the two digit NIC level, with detailed weights drawn from ASISSE.
| Feature | IIP | ISP trial series |
|---|---|---|
| Sector covered | Mining, manufacturing and electricity | Formal services sector |
| Base year | 2011-12 | 2024-25 |
| Frequency | Monthly | Monthly |
| Release lag | About 42 days on the 12th of each month | About 60 days on the 29th of each month |
| Main data source | Production returns from factories and source agencies | GST outward supplies, administrative data and ASISSE |
| Measurement | Mostly physical quantity | Turnover deflated by price index, except railways and air transport which use quantity |
The two indices together give a fuller picture of short term activity. The IIP captures less than one third of GVA, while services alone account for more than half. Without the ISP, monthly monitoring depended on indirect proxies such as the Purchasing Managers Index (PMI) for services, bank credit or GST collections, none of which measure production volume on a comparable basis.
Why 2024-25 Was Chosen as the Base Year
A base year is the reference year against which all later change is measured. In the base year the index is set at 100, so a later reading of 120 means output is 20% higher than the base year average. A good base year should be recent and normal, without major shocks that distort the comparison.
MoSPI selected 2024-25 because it meets both tests of recency and normality. The choice also aligns the ISP with the new Consumer Price Index (CPI) series, which has base year 2024. Since most ISP sub-sectors use CPI based deflators to remove price effects, a common base keeps value, price and volume measures consistent. This alignment also matches the ongoing revision of national accounts and price statistics, including the planned GDP base revision to 2022-23.
The older IIP still uses 2011-12 as its base, which shows why a fresh base matters for services. A 2011 base would miss the rapid rise of digital services, organised retail, logistics and IT enabled support over the last decade. The 2024-25 base captures the present structure of formal services, including wider GST coverage after the tax was introduced on 1 July 2017.
How the ISP Is Calculated: Data Sources and Deflators
The ISP uses three principal data sources, applied differently for each sub-sector. The first is GST data on taxable outward supplies from monthly GSTR-1 returns. Each service is coded under the Service Accounting Code (SAC), which is mapped to NIC codes to estimate turnover by industry. GST data covers 15 sub-sectors including wholesale and retail trade, road transport, telecommunications, real estate, IT services and recreation. MoSPI uses only aggregated SAC totals from the Goods and Services Tax Network (GSTN) and does not access firm level records.
The second source is administrative data for air transport, railway transport, banking and insurance, where quantity or regulatory records are more reliable than tax filings. For example, passenger and freight volumes feed the transport indices, while banking and insurance use supervisory aggregates. The third source is ASISSE data, the Annual Survey of Incorporated Services Sector Enterprises, which provides weights and will support future indices for health and education.
Because GST and administrative records report value, which mixes price and quantity, a deflator is needed to isolate real change. A deflator is a price index used to strip out inflation from nominal turnover, leaving volume growth. International practice prefers Service Producer Price Indices (SPPIs), which track prices charged by producers. India has SPPIs for only a few services and they are quarterly with a 60 day lag, so they cannot support a monthly index.
MoSPI therefore uses the Wholesale Price Index (WPI) for wholesale trade and suitable Consumer Price Index (CPI) variants for most other sub-sectors. Banking, insurance and repair services use CPI General, real estate uses CPI for actual rentals for housing in urban areas, telecom uses CPI for information and communication, and several knowledge services use CPI Services. Railways and air transport need no deflator because they are measured directly in quantity terms. The conceptual framework was guided by the Technical Advisory Committee on ISP (TAC-ISP), set up in May 2025 under chairperson Debjani Ghosh of NITI Aayog, which submitted its approach paper on 27 April 2026 and final report on 7 July 2026.
Why the Services Index Matters for India
The service sector drives growth, jobs, exports and tax revenue, so timely data improves policy and business decisions. Real GDP grew 7.8% year on year in the April to June quarter of 2026-27 to ₹81.36 lakh crore, while nominal GDP rose 10.3% to ₹88.27 lakh crore. A monthly services volume index helps explain which parts of services support that growth, whether property and retail demand, logistics and warehousing, or IT and banking.
For monetary and fiscal policy, the split between price and volume matters. If turnover rises only because prices rose, there is no real expansion. By publishing volume indices with stated deflators, the ISP lets analysts see real momentum separate from inflation. For businesses, sub-sector indices for trade, transport, hospitality and professional services give early signals on demand, capacity and hiring.
The June pattern illustrates the point. Real estate, retail and wholesale strength points to resilient domestic consumption and property transactions, while 11.4% growth in banking and 13.5% in IT services points to continued demand for finance and technology. The single contraction in air transport, down 6% to an index of 91.2, stands out against broad expansion and invites closer study of fares, capacity and seasonal factors rather than a reading of overall weakness.
The Way Forward: From Trial Series to Composite Index
The present releases are labelled trial or experimental for a clear reason. GST data is being used for the first time in statistical applications, and some sources are still stabilising. MoSPI will use the trial period to test data quality, check stability of the 19 sub-sector indices, receive user feedback and refine methods before regular publication.
Two steps will complete the framework. First, MoSPI will compile a single composite or overall ISP after studying the resilience of sub-sector indices and improving coverage. At present there is no weighted headline number, so the finding that 18 sub-sectors grew shows breadth but not aggregate services growth. Second, coverage will expand to health, education and ownership of dwellings, which are large but GST exempt or non market segments. Once added, coverage is expected to rise from about 60% to more than 80%.
The release calendar is now fixed. After the April 2026 launch on 14 July 2026, monthly trial indices are published with a lag of about 60 days on the 29th of every month. Data are available on the MoSPI website and the eSankhyiki portal. Indices for railways, banking and insurance use provisional monthly inputs and will be revised annually as final administrative totals become available.
Key Takeaways
- The trial Index of Services Production (ISP) released by MoSPI is India’s first monthly volume measure of the formal services sector.
- The ISP uses 2024-25 as the base year and currently covers 19 sub-sectors accounting for about 60% of services activity.
- Real estate was the fastest growing sub-sector in June 2026 with 24.7% year on year growth to an index level of 119.0.
- In June 2026, 8 sub-sectors recorded double digit growth and 18 of 19 recorded positive growth, while air transport contracted by 6.0%.
- The ISP complements the IIP (base 2011-12) and is compiled as a Laspeyres volume index using GST data, administrative data and ASISSE weights with WPI and CPI deflators.
