NEW ISP: 14 of 19 sectors see double-digit growth in April

New Delhi: India's formal services economy started the new fiscal year on a strong note, with 14 of the 19 sectors covered under the newly launched Index of Service Production (ISP) posting double-digit growth in April.

Accommodation and food services led the expansion, growing 37.2% year-on-year in April, followed by retail trade (30.8%), administrative and support services (28.7%), and real estate (27.7%), indicating resilient domestic demand. The ministry of statistics and programme implementation (MoSPI) launched the ISP on Tuesday, with a base year of 2024-25. The monthly index tracks output across 19 services sectors that together account for more than half of India's economic output.

Also read: What is the Index of Services Production and which sectors does it cover?

The trial index covers about 60% of the services sector.

Chief economic adviser V. Anantha Nageswaran described the introduction of a monthly services output indicator as "a real achievement". Among other sectors, telecommunications grew 22.8% in April, repair services grew 19.2%, road transport grew 18.5%, and warehousing and transport support services grew 18.2%. In contrast, railway transport contracted 0.4%, while air transport declined 13.9%.

"Building price indices for services is, of course, not an easy task, as it is the case for goods in general, and that is the most valuable investment we can make, and we will continue to make in producing this index of services production," said the CEA.

He added that the ISP's coverage will eventually expand to include health, education and ownership of dwellings, raising its coverage of the formal services sector to about 85-90%.

MoSPI secretary Saurabh Garg highlighted that India has joined the group of few countries (the United Kingdom, European Union and South Korea) which have this index. He noted that the ISP is an output indicator and not a value-added indicator.

The CEA cautioned against reading a single month's data, stressing that the series should be read over time. The reading suggests that India's formal services sector entered FY26 on a strong footing.

On average, accommodation and food services led the growth with 35.6% in FY26. Next was retail trade at 30.5%, followed by repair services (25.1%), wholesale trade (23.6%), and road transport (22.6%).

Administrative/secondary data, GST data and Annual Survey of Incorporated Services Sector Enterprises (ASISSE) data are the three principal data sources used in the ISP. The ministry uses administrative data for sectors such as railways, air and water (freight) transport, banking, insurance, while GST data is used to compile indices for trade, telecommunications, water transport (passenger), real estate, information technology and others.