MoSPI proposes bringing education, healthcare, defence into service output index

The Ministry of Statistics and Program Implementation (MoSPI) has proposed widening the Index of Services Production (ISP) to cover education, healthcare, public administration, and defence. 

The ministry began compiling the ISP for the formal sector on a trial basis in July 2026, with 2024-25 as the base year. The monthly index now covers 19 broad service sub-sectors, based on high frequency administrative data sources and data of outward supplies from goods and services tax (GST).

These sources collectively account for about 60% of services-sector gross value added (GVA). However, the present framework does not include core government and non-market activities, and goods and services tax-exempt services. To bridge these gaps, MoSPI has released an approach paper setting out three more areas that can be brought in.

Together, education, health and residential care and public administration and defence made up almost 21% of services GVA for 2024-25. Adding them would lift the monthly ISP coverage to around 78.4%.

The MoSPI has invited views and comments on the proposed methodology from experts, academicians, central government ministries and departments, state governments, financial institutions and other stakeholders by October 16, 2026.

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MoSPI: How each sector will be measured

The approach paper primarily aims to identify reliable monthly or high-frequency indicators of output and suitable deflators for converting nominal indicators into measures of real service production.

Education makes up 7.15% of total services GVA in 2024-25 and involves significant activity from the public, private and household sectors. For public education services, it is proposed to use the budgetary data available through the Public Financial Management System (PFMS) as a proxy indicator. 

For the private segment, transaction data based on unified payments interface merchant category code will provide a potential high frequency indicator, which will be deflated by consumer price index for education

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MoSPI ISP: Integration, aggregate framework

The overall index will be compiled by aggregating existing ISP sub-indices with newly developed sub-sectoral indices using their shares in services-sector GVA in 2024-25 as weights. With the inclusion of education, health and public administration and defence, the expanded index will cover about 78.4% of the service sector GVA.

For public administration and defence, the sum-of-costs approach provides the conceptual basis, the main components being compensation of employees and operational expenditure.