NEW DELHI: India’s services sector recorded divergent trends in August 2026, with retail trade growing 19.9% year-on-year while air transport contracted 9.6%, according to the first set of figures released under the new monthly services production index on October 29.
Data from the Ministry of Statistics and Programme Implementation (MoSPI) show that 17 of the 19 services sub-sectors recorded growth over August 2025, with 13 posting double-digit expansion.
Introduced on a trial basis in July, the index, with 2024–25 as its base year, aims to provide a monthly measure of services activity, complementing the Index of Industrial Production. However, it currently covers only about 60% of the sector’s gross value added (GVA) and does not provide an overall measure of services output.
Major areas, including government education, healthcare and public administration, remain excluded. MoSPI’s October 6 approach paper proposes their inclusion, which would raise coverage to 78.4%. These sectors accounted for 7.15%, 2.96% and 10.68% of services GVA, respectively, in 2024–25.
The ministry proposes using government expenditure records to track public services and Unified Payments Interface (UPI) transactions to measure parts of private education and healthcare activity. Much of these services is exempt from GST, limiting the usefulness of existing tax-based data.
Among the covered sub-sectors, repair services and real estate grew 17.6% each, insurance 16.5%, banking 14.9% and IT services 13.8%. Air transport declined for the fifth consecutive month, while arts, entertainment and recreation contracted 4.7%.