India’s Ministry of Statistics and Programme Implementation (MoSPI) has proposed expanding its trial Index of Services Production (ISP) to include education, human health and residential care, and public administration and defence. If adopted, the additions would raise the index’s coverage from about 60% to about 78.4% of services-sector gross value added (GVA), according to MoSPI. The proposal was open for stakeholder comments through 16 October 2026; the additions are not yet part of the published monthly trial.
What MoSPI is proposing
MoSPI began compiling the formal-sector ISP on a trial basis in July 2026, using 2024–25 as its base year. The monthly indicator is intended to track changes in the real volume of services output, much as the Index of Industrial Production tracks industrial output. The initial framework covers 19 broad service subsectors, representing approximately 60% of services-sector GVA, as described in MoSPI’s 6 October 2026 announcement and approach paper.
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The proposed additions together account for nearly 21% of services-sector GVA in 2024–25. MoSPI estimates that their inclusion would take total ISP coverage to approximately 78.4%. These are coverage estimates based on services-sector GVA, not a claim that the index captures the same share of India’s GDP.
| Proposed subsector | Share of services-sector GVA, 2024–25 |
|---|---|
| Education | 7.15% |
| Human Health & Residential Care | 2.96% |
| Public Administration & Defence | 10.68% |
The three shares total 20.79%, which is consistent with MoSPI’s rounded description of “nearly 21 per cent.” The proposal is broader than the shorthand “health and education” suggests: it also includes public administration and defence.
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How education and health would be measured
Services are difficult to track because they are often intangible, vary in form, and are produced and consumed at the same time. A change in money spent does not necessarily mean the same change in services delivered. MoSPI therefore proposes combining government expenditure records and digital payment transactions with price indexes that adjust nominal spending for inflation. The approach paper describes the proposed framework as combining “administrative expenditure data, UPI transaction data and appropriate price deflators.”
Education
Education represented 7.15% of services-sector GVA in 2024–25. Within education-sector GVA, MoSPI reports 65.61% public activity, 24.91% private activity and 9.48% household activity. Because core instructional services are exempt from GST, the proposal does not use GST as the main measure.
For public education, MoSPI proposes using central government expenditure recorded in the Public Financial Management System (PFMS), especially salary and grant-in-aid spending. For private and household education, it proposes using monthly UPI transactions grouped by National Payments Corporation of India merchant category codes (MCCs), including codes for schools, colleges, professional and vocational schools, and related services.
Rank #2
The proposed deflator for private UPI spending is CPI Education. For public spending, MoSPI proposes a six-month moving average of CPI-IW, the Consumer Price Index for Industrial Workers, reflecting the importance of salaries in costs. The public, private and household components would be combined using their respective base-year GVA shares.
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This subsector represented 2.96% of services-sector GVA in 2024–25. Its reported composition was 42.66% public, 37.21% private and 20.12% household activity. Health insurance is counted in the insurance subsector rather than in health.
Patient discharges, occupied bed-days, consultations and procedures could more directly indicate the volume of care delivered, but MoSPI says these measures are not available from secondary or administrative sources at the required monthly frequency. Core health services are also GST-exempt. The proposed public measure is PFMS expenditure, including compensation for doctors, nurses, other medical staff and employees. For private healthcare, MoSPI proposes UPI MCC transactions covering hospitals, doctors, dentists, laboratories, nursing and personal-care facilities, and other practitioners.
Rank #3
The proposed deflator is CPI Health for private healthcare transactions and a six-month moving average of CPI-IW for public expenditure. As with education, the components would be weighted using their base-year GVA shares.
How public administration and defence would be measured
Public Administration & Defence accounts for 10.68% of services-sector GVA in 2024–25. MoSPI describes it as entirely public and non-market, so sales and turnover are not meaningful indicators of output prices. Instead, the proposal uses a “sum-of-costs” approach: employee compensation plus intermediate consumption, or operating expenses.
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1Scan for outdated or missing drivers - takes under a minute2Clear out junk files and repair common Windows errors3Fix the driver behind crashes, sound loss and screen glitchesFor the central government and union territories without legislatures, the proposed monthly source is PFMS ledger data. For states and union territories with legislatures, MoSPI proposes monthly state account reports available from the Comptroller and Auditor General of India (CAG). Employee compensation includes relevant salaries, allowances and wages for civil servants and defence personnel. Operating costs include items such as professional services, office expenses, travel, advertising and supplies.
Rank #4
The proposed deflator is a six-month moving average of CPI-IW for employee compensation and a six-month moving average of CPI General for operational spending. Compensation and operational-expense indicators would be combined using weights based on their shares of output.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What the proposed indicators can—and cannot—show
For education and health, UPI transactions are a proxy for private and household spending, not a direct count of lessons, treatments or other services delivered. MoSPI cautions that measured activity could change when people shift between digital and non-digital payments, or because of refunds, reversals or migration between payment methods. A rise in UPI spending therefore cannot automatically be read as an equivalent rise in real service output.
There is also a gap in monthly state-level data for public education and health institutions: the state accounts used in the proposal do not separately provide this expenditure at the required frequency. MoSPI proposes central PFMS spending as a broad directional measure of public education and health, which does not directly capture the full pattern of state spending.
Government expenditure can also be uneven from month to month. Payment and accounting cycles may concentrate operational spending in particular months, including through periodic quarterly or annual payments. Deflators and base-year weights are intended to improve the conversion from spending to volume measures, but they do not make spending a direct count of output.
What happens next
MoSPI’s approach paper seeks comments on the proposed variables, sources and methodology. Stakeholder comments were invited through 16 October 2026. Until MoSPI finalizes and implements the changes, the three proposed subsectors should not be treated as already included in the monthly trial ISP.
For context on the original trial’s purpose and framework, see MoSPI’s 7 July 2026 Technical Advisory Committee release and its 24 June 2026 ISP FAQ.
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