NEW DELHI: Thirteen of the 19 services sub-sectors recorded double-digit growth in August, up from 10 in July, according to the fifth print of the trial Index of Services Production (ISP) released by the National Statistical Office (NSO) on Thursday. Overall, 17 sub-sectors expanded — same as the previous month.
DK Srivastava, chief policy advisor, EY India, noted that ISP grew 14 per cent in August, up from 13.5 per cent in July, confirming robust growth momentum. “An upward growth momentum of double digits is shown by the ISP since June 2026, with an average growth of 13.6 per cent during the three months till August 2026. Given the weight of services sector in overall GDP, these trends indicate the potential of a healthy GDP growth for the second quarter of 2026-27. This is also confirmed by the second quarter IIP growth, which averaged 7.3 per cent,” he added.
The trial ISP, with 2024-25 as the base year, accounts for nearly 60 per cent of India’s services output. It is the country’s first high-frequency measure of monthly activity in the sector, filling a long-standing gap alongside the Index of Industrial Production (IIP).
Eleven sub-sectors recorded a higher year-on-year growth rate in August, compared to July. Retail trade recorded the fastest growth at 19.9 per cent, as against 18.5 per cent in July.
Real estate and repair services grew 17.6 per cent each. Repair services saw the biggest pickup in growth from a 5 per cent contraction in July. This was followed by insurance at 16.5 per cent, banking at 14.9 per cent, professional, scientific and technical services, including research and development, at 14.2 per cent.
Administrative and support services, which led in July, slowed to 13.1 per cent from 20.9 per cent.
Transport segments showed mixed trends. Postal and courier services quickened to 13.2 per cent from 8.7 per cent, warehousing to 11.2 per cent from 9.8 per cent, and water transport to 9.5 per cent from 7.7 per cent.
On the other hand, road transport eased to 9.4 per cent from 9.9 per cent. Railway transport growth roughly halved to 3.7 per cent from 7.5 per cent, the slowest among the sub-sectors that expanded.
Information and broadcasting dropped out of the double-digit growth group, while four sub-sectors entered it: repair services, insurance, postal and courier and warehousing.
The sharpest deceleration came in administrative and support services, according to the data. Next came arts, entertainment and recreation, swinging to a 4.7 per cent contraction from 1.7 per cent growth in July. It is the segment’s first contraction since the release of the data series.
Air transport contracted for a fifth consecutive month, and the decline widened to 9.6 per cent from 8.4 per cent in July.
“The air transport decline probably occurred due to higher airfares caused by elevated fuel prices from the West Asia crisis, and DGCA’s (Directorate General of Civil Aviation) passenger traffic data supports this claim,” said Pranjal Ghate, economist at Brickwork Ratings.
In index terms, accommodation and food stood highest at 145.3, followed by retail trade at 139.2, repair services at 130.7, road transport at 128.4 and warehousing at 126.8.
Air transport stood lowest at 89.2, followed by information and broadcasting at 98.6.
Source: Business Standard
