The Ministry of Statistics and Programme Implementation (MoSPI) released a new Service Production Index (ISP) showing a 35% year‑on‑year surge in the accommodation‑and‑food sector for 2025‑26, while rail and air transport services posted declines. This marks the first official monthly gauge of India's service‑driven economy.

Key Takeaways (मुख्य बिंदु)

  • Accommodation & food sub‑sector recorded a 35% YoY growth
  • Rail transport fell 0.4% and air transport contracted 13.9% in April
  • MoSPI's ISP provides the first official monthly measure of services output

The Ministry of Statistics and Programme Implementation (MoSPI) unveiled a trial Service Production Index (ISP) on July 14, offering the first systematic, monthly view of India’s services sector. According to the experimental data, the ‘accommodation and food’ sub‑sector expanded by more than 35% year‑on‑year in 2025‑26, making it the fastest‑growing slice of the economy.

Why the New Index Matters

Historically, India lacked a monthly indicator for services output; analysts relied on private‑sector surveys such as S&P Global’s Services PMI. The ISP mirrors the well‑known Index of Industrial Production (IIP) but for services, covering 19 sub‑sectors that account for roughly 60% of the services economy. By leveraging Goods and Services Tax (GST) returns and other administrative data, MoSPI sidesteps the need for fresh questionnaires, reducing compliance burdens on businesses.

Sector‑by‑Sector Snapshot

Beyond accommodation and food, the ISP tracks wholesale and retail trade, repair services, road, water and warehousing logistics, telecommunications, information and broadcasting, banking, insurance, real estate, IT and computer services, professional‑scientific‑technical services, administrative support, and arts‑entertainment‑recreation. Health and education remain outside the current index because they are GST‑exempt, though MoSPI is working on incorporating them using alternative administrative sources.

Rail and Air Transport Under Pressure

Rail transport, after an average 2.5% growth last year, contracted by 0.4% in April. Air transport, which enjoyed a 4.4% average monthly rise in 2025‑26, recorded a sharp 13.9% drop in April—a fallout of the West‑Asia conflict that spiked fuel costs and forced airlines to raise fares.

Implications for Policy and Growth

As the ISP matures, it will fill a critical statistical gap, allowing policymakers to gauge the health of the service‑driven engine that now contributes over half of India’s Gross Value Added. Core government activities, defence, RBI operations, and the informal sector—accounting for roughly 30% of services—remain excluded, but future revisions may broaden coverage.