MoSPI to use GST data forservices production index
The Ministry of Statistics and Programme Implementation (MoSPI) is considering using aggregated Goods and Services Tax (GST) data on outward supplies as a key proxy to track short-term production trends in India’s dominant services sector.
The proposal forms part of MoSPI’s broader initiative to develop an Index of Service Production (ISP), a high-frequency indicator akin to the existing Index of Industrial Production (IIP), to better capture real-time movements in services sector, which contributes over 50% of the country’s Gross Value Added (GVA).
MoSPI proposed to compile the ISP with 2024-25 as the base year. “At present it is proposed to keep 2024 – 25 as the base year for the purpose of compiling trial indices,” the approach paper reads.
To ensure feasibility, the ministry aims to cover about 70% of the services sector’s GVA for compiling an overall ISP, while acknowledging exclusions of around 33% of services GVA, including public administration, defence, certain non-market financial services, ownership of dwellings, and informal/unincorporated segments.
The unavailability of ISP created a critical data gap in assessing overall economic performance, MoSPI said. It stated that currently, quarterly estimates as well as the First Advance Estimates, Second Advance Estimates (SAE), and Provisional Estimates of Gross Value Added (GVA) are compiled using the benchmark-indicator method with limited high-frequency data.
