India’s service producer prices showed a sharp divergence across sectors in the first quarter of FY27 (Q1FY27), with air passenger services recording a 31.94% year-on-year increase, while banking service prices remained in deflation, according to provisional estimates released by the government on Monday.
The service price index rose to 126.4 in Q1 FY27 from 106.9 in the fourth quarter of FY26. Its year-on-year inflation stood at 31.94% in the latest quarter, the highest among the seven services covered in the Service Producer Price Index.
The management of pension fund service price index recorded the second-highest year-on-year increase, rising 5.20% in Q1FY27. The index increased to 113.3 from 103.8 in the previous quarter.
service price index rose marginally to 100.9 in Q1 from 100.5 in Q4 FY26, but remained in deflation, with year-on-year inflation at -3.35%, compared with -4.10% in the previous quarter.
In contrast, the banking service contribution index accelerated, with year-on-year inflation rising to 6.90% in Q1 FY27 from 3.30% in Q4FY26. The index increased to 134.8 from 131.5 during the quarter.
The securities transaction service price index declined to 89.9 in Q1FY27 from 91.7 in Q4FY26, with year-on-year inflation turning negative to -1.32%, down from 0.55% in the previous quarter.
The insurance service price index remained unchanged at 102.9, while year-on-year inflation rose marginally to 0.98% from 0.68% in Q4FY26.
The telecom service price index also remained unchanged at 112.2, with year-on-year inflation easing to 0.72% from 0.99%.
service prices increased marginally during the quarter. The railway service price index rose to 103.4 from 103.3, while year-on-year inflation increased to 1.27% from 1.18%.
The railway freight service price Index rose to 103.3 from 103.2, with year-on-year inflation at 0.10%. The railway passenger service price index remained unchanged at 103.5, with inflation holding at 3.50%.
PPI for services
The service producer price indices have been compiled with 2022-23 as the base year. The government said weights have not been assigned to the seven services at the aggregate level as they do not cover the entire services sector. However, sub-service-level weights based on FY23 data have been used to calculate the PPI for each service.
The government has released provisional service PPIs for Q1 and final indices for Q4FY26. Service PPIs for the second quarter of FY27 are scheduled for release on 25 November 2026.