The index will cover sub-sectors such as wholesale and retail trade, transport, banking, insurance, communication, hotels and restaurants, real estate, professional, scientific and technical services, arts, entertainment and recreation.
The ministry of statistics and programme implementation (MoSPI) also suggested using administrative data from sectoral ministries and the Annual Survey of Incorporated Services Sector Enterprises.
“MoSPI does not have access to nor does it require individual unit level data for this purpose, thus preserving the confidentiality of such dis-aggregated information,” the ministry said in a statement on GST data.
The ISP aims to complement the Index of Industrial Production (IIP) by capturing short-term economic trends and providing high-frequency data on the services sector to support policy and analysis, according to the approach paper released by the ministry.
It suggested using different deflators for different sub-sectors: the Wholesale Price Index (WPI), Consumer Price Index (CPI), Gross Value Added (GVA) and Service Producer Price Index (SPPIs). While CPI has a 2024 base year, others use 2022-23 and will be aligned to 2024-25 using base-shifting and splicing methods.
The approach paper noted some limitations in the trial indices, including the limited availability of SPPIs, lack of data for sectors accounting for nearly 33% of GVA, and reliance on GST data, which excludes small service providers with turnover below Rs 20 lakh.MoSPI has invited feedback on the methodology from experts, government bodies, and stakeholders by May 5.