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MoSPI plans to widen monthly services index to 78.4% of services GVA

By CAShorts DeskPublished Updated Source: Mint (MoSPI approach paper)

MoSPI plans to widen monthly services index to 78.4% of services GVA
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The statistics ministry (MoSPI) has released an approach paper proposing to add education, healthcare and residential care, and public administration and defence to its monthly Index of Services Production. The change would lift the index's coverage from about 60% to 78.4% of services-sector gross value added. It has invited public feedback before finalising the method.

Syllabus: GS3 · Indian Economy & Growth; Prelims · Economy & Social Development

Why it matters

Teaching, healthcare and government work make up about a fifth of India's services output, but they are hard to measure every month because much of their output is not sold at a market price. Today the monthly services index covers only about 60% of the services sector. Bringing in schools, hospitals and government offices would give policymakers a fuller monthly picture of how the services economy is doing, instead of leaning mostly on sectors where sales are easy to track. The plan also tests whether new data, such as digital payments and government spending records, can improve official statistics, though MoSPI admits these sources have weaknesses.

Prelims pointers

  • Index of Services Production (ISP): MoSPI's monthly index of formal-sector services output, released on a trial basis since July 2026.
  • Public Financial Management System (PFMS), run by the Controller General of Accounts in the Ministry of Finance, is the proposed source for Central spending data.
  • Merchant-category-code (MCC) based UPI payments are proposed as indicators of private education and private healthcare; UPI is operated by the National Payments Corporation of India.
  • Deflators: education CPI for private education; six-month moving average of CPI-IW for public education and for public administration and defence pay; of general CPI for its operating costs.
  • CPI-IW, the Consumer Price Index for Industrial Workers, is compiled by the Labour Bureau under the Ministry of Labour and Employment.
  • CAG, a constitutional authority under Article 148, compiles the monthly State Accounts proposed as the source for State and UT data.
  • Still outside ISP: ownership of dwellings, financial services other than banking and insurance, and 'other services' such as gambling.
  • GDP equals GVA plus product taxes minus product subsidies.

Practise a UPSC-style question

With reference to the Index of Services Production (ISP), consider the following statements:

1. It is compiled every quarter by the Ministry of Statistics and Programme Implementation for the formal services sector.

2. Its trial framework covers 19 broad sub-sectors accounting for about 60% of services GVA.

3. Education, health and public administration were left out at first owing to their non-market nature, government role or GST exemption.

Which of the statements given above is/are correct?

  1. (a) 1 and 2 only
  2. (b) 2 and 3 only
  3. (c) 1 and 3 only
  4. (d) 1, 2 and 3
Show the answer

Answer: (b) 2 and 3 only

1 is incorrect: the ISP is a monthly index, released on a trial basis since July 2026 with 2024-25 as its base year. 2 is correct: its initial framework covers 19 broad sub-sectors, nearly 60% of services gross value added. 3 is correct: these three were excluded because of their non-market structure, heavy government footprint or GST-exempt status, which makes their output hard to measure from sales.

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