MoSPI Explores Using GST Data To Track Services Sector Via New ISP

The proposed ISP aims to function as a real-time indicator, similar to the Index of Industrial Production (IIP), to better capture movements in the services sector, which contributes over 50 per cent to India’s Gross Value Added (GVA), reported Financial Express. Coverage, Methodology and Data Gaps According to an approach paper, MoSPI has proposed 2024-25 as the base year for compiling trial indices. The ministry intends to cover around 70 per cent of the services sector’s GVA. They also acknowledged that nearly 33 percent, comprising segments such as public administration, defence, certain non-market financial services, ownership of dwellings, and informal sectors, may remain outside its scope. MoSPI noted that the absence of a dedicated ISP has created a gap in assessing real-time economic performance. Currently, quarterly and advance estimates of GVA rely on the benchmark-indicator method with limited availability of high-frequency data. At present, services sector GVA is released in a highly aggregated format across three broad categories, with detailed sub-sectoral data becoming available only at later stages such as the First Revised Estimates (FRE) or Final Estimates. The proposed ISP is expected to improve the timeliness, accuracy, and granularity of economic data by supplementing existing indicators. GST data, particularly outward supply details from monthly and quarterly returns, is being evaluated for its feasibility in compiling both sub-sectoral and overall service production indices. Additional Data Sources to Strengthen Framework The ministry has also identified additional data sources, including the upcoming Annual Survey of Incorporated Services Sector Enterprises (ASISSE), scheduled to begin from 2026-27. The survey will provide key metrics such as GVA, capital formation, employment, and turnover, especially for sub-sectors where alternative data sources are not available. GST-based indices will primarily capture market output and exclude GST-exempt sectors such as health and education, which will instead be covered through ASISSE data. MoSPI said the introduction of an ISP would significantly strengthen India’s statistical framework by enabling more responsive and detailed tracking of the services sector. (KNN Bureau)