Attention How fast is your business growing? Government will track monthly output from GST

MOSPI Service Index: The Ministry of Statistics and Program Implementation (MoSPI) on Monday is set to launch a new monthly indicator called ‘Index of Service Production’ (ISP) to measure the output of the formal services sector every month. This index will mainly use Goods and Services Tax (GST) data, so that the activities of the service sector can be closely monitored.

Releasing an ‘approach paper’ on this, the Statistics Ministry on Monday sought comments till May 5 on its plan to create a Service Production Index (ISP) for the formal sector of the economy considering 2024-25 as the base year. This paper has come just before the revision of Index of Industrial Production (IIP) to be held next month. This is a part of the major changes being made by MoSPI in government data.

What is its purpose?

At present, there is ‘Index of Industrial Production’ (IIP) for the manufacturing sector, but there is no such monthly indicator for the service sector. ISP will remove this deficiency. This is also important because the contribution of service sector in India’s GDP is more than 50 percent. This will include more than 40 sub-sectors like wholesale and retail trade, transportation, warehousing, telecommunications, banking, insurance, real estate, hotels and restaurants.

What will be the source of the data?

As already mentioned, GST network will be its primary source, which will provide information about production and supply data of various sectors. Additionally, administrative data from ministries and other organizations for GST-exempt sectors such as education and health will be used.

What will be the benefit?

Since half of the economy comes from the service sector, this data will help the government in taking right decisions at the right time and making the budget. If ever people suddenly start spending more on hotels or flights, then this data will clearly show that this sector is still growing.

Also read:

Now more than 20% ethanol will be available in petrol! Government’s big decision, preparation to reduce import bill