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India Tackles Services Sector Data Gap
14 Jul
Summary
- New Index of Services Production to be released on trial basis.
- Base year for the new index is 2024-25.
- GST data crucial for compiling 15 of 19 sub-sectors.
The Ministry of Statistics and Programme Implementation will soon release a trial Index of Services Production (ISP), a new tool to measure output changes in India's vital services sector. This sector forms over half of the nation's economy and is a major source of employment. The ISP will track growth across 19 sub-sectors, using 2024-25 as its base year and will be published with a 60-day lag.
Compiling the ISP presents unique challenges due to the intangible nature of services, unlike easily quantifiable industrial output. However, recent improvements in India's data ecosystem, particularly the availability of GST data on outward supplies and annual surveys, have made compilation feasible. GST data will underpin the measurement of 15 of the 19 sub-sectors, highlighting the tax system's critical role.
Despite these advancements, some significant portions of the services sector, like public administration and defence, and certain financial services, are still excluded from this initial ISP. Information and computer-related services are anticipated to hold the largest weight in the trial index, followed by retail trade, reflecting their prominence within the economy.
