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Govt Plans Index of Service Production to Track Formal Economy Using GST Data

The Indian government has proposed creating an Index of Service Production (ISP) using aggregated GST data to monitor the services sector. Currently, unlike the Index of Industrial Production (IIP), there is no ISP to capture short-term movements in services. A Technical Advisory Committee on ISP was formed in May 2025 and has prepared an Approach Paper covering over 40 sub-sectors. The move aims to fill a critical data gap, as the services sector contributes over half of India's GDP and generates millions of jobs.

Key Points: Index of Service Production: Govt to Use GST Data for Economy

  • Govt proposes ISP using aggregated GST data
  • No current index for service sector short-term movements
  • TAC-ISP formed in May 2025 prepared Approach Paper
  • Covers over 40 sub-sectors including trade, transport, banking
  • Comments invited by May 5, 2026
2 min read

Govt plans Index of Service Production to track formal sector of economy

Govt proposes Index of Service Production (ISP) using aggregated GST data to monitor services sector, fill data gaps, and boost economic performance assessment.

"The services sector is the most dynamic and rapidly expanding segment of the economy and contributes over half of India's GDP and generates millions of jobs. - Ministry of Statistics & Programme Implementation"

New Delhi, April 27

The government on Monday proposed to use aggregated GST data to monitor services sector and boost ability to assess overall economic performance.

Unlike the Index of Industrial Production (IIP), there is currently no Index of Service Production (ISP) to capture short‑term movements in the services sector.

Ministry of Statistics & Programme Implementation does not require or seek access to individual unit‑level returns for this data compilation.

A Technical Advisory Committee on ISP was constituted in May 2025, and has prepared an Approach Paper on compiling an ISP for the formal sector after deliberations over the past year.

The proposed approach has been developed with reference to international best practices and in consultation with members of the TAC-ISP, the statement said.

Approach Paper analyses over forty sub‑sectors of the services sector in terms of availability of data on output and their suitability in terms of coverage.

The paper also discusses availability of most appropriate price deflators and methods to standardize the base of these deflators. The key sub - sectors covered include wholesale and retail trade, transport, banking, insurance, communication, hotels and restaurants, real estate, professional, scientific and technical services, arts, entertainment and recreation, etc.

MoSPI invited views and comments from experts, academicians, Central government ministries or departments, state governments, financial institutions and other stakeholders on the proposed methodology by May 5, 2026.

The services sector is the most dynamic and rapidly expanding segment of the economy and contributes over half of India's GDP and generates millions of jobs.

National Statistics Office (NSO), MoSPI has been grappling with the issue of compilation of Index of Service Production for quite some time and its unavailability created a critical data gap in assessing overall economic performance, the ministry said.

India's data landscape has seen a transformation recently fuelled by data demand, adoption of technology and digitalization of administrative and secondary data sources. The implementation of the Goods and Services Tax (GST) in India on July 1, 2017, marked a fundamental shift in economic analysis as monthly GST collection data acts as a powerful barometer for economic activity, the statement noted.

- IANS

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Reader Comments

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Priya S
This sounds promising but I'm a bit skeptical. We have so many small service providers—local salons, tiffin services, or freelance workers—who aren't even in the GST net. Will this index capture the informal sector? If not, it's only telling half the story. Still, a step in the right direction.
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Arjun K
Brilliant! The IIP has been outdated for decades. Services contribute over 50% of GDP but we've had no real-time metric. Kudos to the government for leveraging GST data—it's a goldmine. The TAC-ISP approach paper covering 40+ sub-sectors shows thorough planning. Ab toh India ki growth real-time track ho jayegi! 🚀
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Nisha Z
I'm a small business owner in the hospitality sector, and this makes me hopeful. Better data means better policy. My concern: Will the government use this to increase taxes on services? GST is already complex for small players. Also, how will they handle price deflators for different sub-sectors like hotels vs. communication? Needs clarity.
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Rohit P
As an economist, this is huge. The unavailability of ISP has been a critical data gap. But I hope the government ensures transparency—publish the methodology and raw data for independent verification. Also, what about sectors like IT services or online education? They're not mentioned. Hope the TAC covers them in the final index.
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Kavya N
About time! The services sector is the engine of our economy—IT, banking, tourism, you name it. This will help policymakers make informed decisions. But I worry about data privacy. GST data is sensitive; the government says it won't access unit-level data, but we need strict safeguards

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