India has always known exactly how much steel, cement, and electricity it produces every month. What it never had, until four weeks ago, was something similar for services: banks, IT companies, hotels, logistics firms, etc that actually make up more than half the economy.
That changed on July 14, 2026, when the Ministry of Statistics and Programme Implementation (MoSPI) released the first trial data for the Index of Services Production (ISP). This is India’s first ever monthly measure of how much the services sector is actually producing.
Why This Took So Long
India’s existing industrial tracker, the Index of Industrial Production (IIP), has worked the same way since 1950. It counts physical things: tonnes of steel, litres of fuel, units of electricity. When something can’t be measured in physical units, it falls back on production value adjusted for wholesale prices. Either way, it’s counting what was actually made, not what it sold for.
Services don’t work like that. You can’t count a consulting hour or an insurance policy the way you count a tonne of steel. For decades, India simply didn’t have the price data or administrative records needed to build a services index, even though services have made up more than half the economy since 2013-14.
That gap mattered a lot. IIP could tell you how factories and mines were doing. Nothing could tell you, month by month, how the bigger half of the economy was performing.
What Finally Made This Possible
The missing piece wasn’t a new idea. It was data. Over the last decade, India built the infrastructure needed through GST filings, which capture sales from registered service businesses, along with a new annual survey of service sector companies.
ISP now pulls from three sources. GST data covers most of it: trade, transport, real estate, IT, and professional services. Administrative records cover sectors like airlines, railways, banking, and insurance. Health and education will eventually be added using survey data once it’s ready.
Since services get used up the moment they’re produced (there’s no warehouse full of unsold haircuts), MoSPI treats total sales as a stand-in for output. That number is then adjusted to strip out price changes, using wholesale price data, sector specific inflation numbers, or a general inflation measure as a fallback. Only air and rail transport use actual physical measures like passenger distance traveled. Everything else is sales data converted into a volume estimate.
This is why MoSPI is calling it a trial index for now. GST data has never been used this way before, and they want to watch it for a while before making it permanent. The whole thing is built using 2024-25 as the base year, with each sector weighted by its share of the economy.
How This Compares to Other Countries
India isn’t inventing something brand new here. It’s catching up to a small group of countries that already track services output directly. The closest comparison is the UK’s Index of Services, which has fed into Britain’s monthly GDP numbers for years using a similar mix of survey and sales data. The Eurozone has its own version too.
It’s worth separating this from something people might confuse it with: the ISM Services PMI in the US, or similar PMI surveys used elsewhere. Those are based on surveys, essentially asking purchasing managers whether business felt better or worse than last month. They’re fast and closely watched, but they measure sentiment, not actual output. ISP measures real transactions. India already had the PMI. What it lacked was the slower, harder number that tells you what actually happened, not what people felt about it.
What’s Covered and What’s Missing
The trial run covers 19 sub-sectors, roughly 60% of the formal services economy, including trade, transport, telecom, real estate, professional services, and hospitality. It leaves out government administration, defence, informal sector work, personal services, and public health and education, mostly because these either aren’t market driven or don’t fit GST based measurement. Since it only uses GST filings, ISP only captures the formal economy. India’s large informal services sector isn’t counted yet.
The First Numbers
The first batch of data, covering April 2026, showed 14 of 19 sub-sectors growing by double digits year on year. Accommodation and food services led the pack at over 37% growth, with retail trade and administrative services not far behind. Only rail and air transport saw declines.
That’s a strong start, but MoSPI itself is being careful to call it a trial. The methodology could change and coverage will likely expand as they test how reliable GST based estimates really are. For now, anyone using this data, investors, analysts, or policymakers, should treat it with interest but not draw firm conclusions yet.
Still, this is a real gap finally closing. Half of India’s economy just got a monthly pulse check it never had before.
About EquiZen
EquiZen, a registered mutual fund, SIF (ARN-272487 – Sanjay Parikh) and PMS distributor (APRN-00158), offers personalised financial solutions with a focus on safety and transparency. We aim to assist you to achieve financial freedom, the freedom to do what you want and achieve your dreams. We do not push financial products but believe in utilising them judiciously to meet your needs. Learn more at www.equizen.in or contact us via +91 9820605203 or sanjay@equizen.in.
