The government on Monday released the provisional Service Producer Price Indices (PPI) for the first quarter of financial year 2026-27, of seven services — Banking, Securities Transaction, Insurance, Management of Pension Funds, Railways, Air (Passenger), and Telecom with base year 2022-23.
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The data also provide the final estimates for inflation in Service PPI for March quarter of 2025-26 fiscal. Service PPI measures the change in the average prices received by producers on production of a service.
As per the data released by the Commerce and Industry Ministry, inflation in Air (Passenger) Service Price Index rose 31.94 per cent YoY. There is no sequential inflation data as the price reference period for this sector has been taken as 2025-26 fiscal.
Annual inflation in railway passenger service price index rose 3.50 per cent during the June quarter of the current fiscal, which is the same rate as in March quarter of FY26.
Inflation in Banking Service Contribution sector was 6.90 per cent in Q1 of FY27, against 3.30 per cent in Q4 of FY26.Also Read: IndiGo to launch twice-weekly direct flights between Gaya and Bangkok from October 26
The Banking Service Price Index and the Securities Transaction Service Price Index saw a deflation of 3.35 per cent and 1.32 per cent, respectively in June quarter. This compares to a deflation of 4.10 per cent and an inflation of 0.55 per cent in the previous March quarter.
Indices of pension funds, insurance and telecom sectors recorded an inflation of 5.20 per cent, 0.98 per cent and 0.72 per cent, respectively in June quarter, compared to (-)0.76 per cent, 0.68 per cent and 0.99 per cent respectively in March quarter.
The government would eventually include more services in the Service PPI data.
The government had in June came out with the maiden PPI data for both goods and services to better reflect price movement at producer’s level, paving the way for phasing out wholesale price index (WPI)-based inflation numbers in the next five years.
The shift from WPI to PPI follows the submission of the report of the working group under former NITI Aayog member Ramesh Chand in April. The group was set up on December 30, 2024, with the mandate to revise the base year of the WPI from 2011-12 to 2022-23, and compile the PPI with 2022-23 as the base year.
“Unlike WPI, the PPI– comprising a set of indicators such as Output PPI (Goods) and Services PPI — provides a more accurate measure of price changes from producers’ perspective, thereby enhancing its suitability for use in National Accounts/GDP compilation and estimation of real value addition,” Chand had said in the report.