Statistics Ministry to expand Index of Services Production to cover education, healthcare and defence

Key facts

• The Ministry of Statistics and Programme Implementation plans to expand the monthly Index of Services Production (ISP) to include education, healthcare, and public administration and defence, raising coverage to 78.4 per cent of services GVA from about 60 per cent.
• Services account for more than half of India's gross value added (GVA), and the expanded ISP aims to provide a broader high-frequency gauge of services activity.
• The ISP was compiled on a trial basis from July with 2024-25 as the base year, initially covering 19 service sub-sectors.
• The ministry released an approach paper on Tuesday and invited stakeholder comments, with the submission deadline set at October 16.
• The ministry proposes using Unified Payments Interface (UPI) transaction data classified by merchant category codes, combined with price indices, as a proxy for private education and healthcare activity, since GST collections are unreliable for GST-exempt services.
• For public education and health services, Public Financial Management System (PFMS) expenditure data will be used as an output proxy, while public administration and defence, accounting for 10.68 per cent of services GVA, will be measured using a sum-of-costs approach based on employee compensation and operational expenditure.
• The ministry flagged limitations including UPI measuring monetary transactions rather than physical output and government expenditure showing sharp monthly fluctuations due to accounting and payment cycles.