MoSPI plans monthly services sector index using GST, survey data, Pg15

Key Highlights:

• The Ministry of Statistics and Programme Implementation (MoSPI) plans to measure the output of the formal services sector monthly, utilizing Goods and Services Tax (GST) data.
• An 'approach paper' was released by MoSPI, inviting comments by May 5, to compile an Index of Service Production (ISP) with 2024-25 as the base year.
• The services sector contributes over half of India's GDP, generates millions of jobs, and has been a major catalyst for economic transformation.
• The index will cover sectors like trade, transportation, telecom, finance, real estate, and arts.

Detailed Insights:

• GST Network data will be used to monitor the progress of the services sector, providing information on production and outward supplies.
• Sectors exempt from GST, such as health and education, will require additional data sources, including administrative data and the Annual Survey of Incorporated Services Sector Enterprises (ASISSE).
• The data sources exclude the informal sector, accounting for approximately 33% of the total Gross Value Added (GVA) of the services sector.
• MoSPI intends to use measures like the non-food Consumer Price Index (CPI) and sub-sector specific CPI to adjust the output for prices, as a Producer Price Index is not currently available.

Key Concepts Involved:

• Goods and Services Tax (GST): An indirect tax levied on the supply of goods and services.
• Gross Value Added (GVA): A measure of the total value of goods and services produced in an economy.
• Consumer Price Index (CPI): A measure that examines the weighted average of prices of a basket of consumer goods and services.