India has launched a trial Index of Services Production (ISP) to track monthly growth in the services economy. Initial April 2026 data reveals double-digit expansion across 14 sub-sectors, including hospitality and retail. While the index offers a new tool for economic monitoring, analysts suggest viewing early figures with caution as the government refines data collection and coverage.
The Ministry of Statistics has introduced a trial Index of Services Production (ISP) to provide a clearer monthly picture of India's services sector, which accounts for over half of the nation's GDP. By utilizing a 2024-25 base year, the government aims to close a long-standing gap in high-frequency economic data, similar to how the Index of Industrial Production (IIP) tracks manufacturing activity.
April 2026 Sector Performance
Early data released for April 2026 shows strong performance across several industries. Among the 19 tracked sub-sectors, 14 reported double-digit growth. Leading the list were accommodation and food services at 37.2%, retail trade at 30.8%, administrative support at 28.7%, and real estate at 27.7%. These figures highlight a high level of activity in consumer-facing and support services at the start of the fiscal year.
Limitations and Data Accuracy
The index currently faces significant structural hurdles that investors should consider. While it leverages Goods and Services Tax (GST) filings to capture business activity, it does not yet provide a full view of the economy. The current scope covers roughly 60% of service-related business activities but excludes critical areas like health, education, public administration, and defense. Furthermore, because a comprehensive services Producer Price Index is still under development, officials are using broader metrics like the Consumer Price Index (CPI) as temporary deflators to adjust for inflation. This method may lead to reporting variances until more granular, sector-specific data becomes available.
The Challenge of the Unorganized Sector
A major challenge for the accuracy of the ISP is the large number of unorganized enterprises that do not file GST or other formal administrative reports. Estimates suggest the current index may miss a significant portion of total services Gross Value Added (GVA). As a result, the government intends to use these trial figures cautiously, relying on quarterly GDP reports as the primary benchmark for the economy until the ISP matures.
What Investors Should Track
Moving forward, the focus will be on the refinement of this index. Investors should monitor how the government addresses the coverage gap in unorganized services and the eventual development of specialized price deflators. As the GST net expands and more administrative databases are integrated, the consistency of this monthly data will become a critical indicator for assessing sector-specific health and broader economic momentum in India.