Air passenger service prices surged 31.94% year-on-year in Q1FY27, the sharpest increase under India’s new Service PPI framework. Banking service prices declined, while pension funds, insurance, and railway services recorded modest increases.
Air passenger service prices surged 31.94 per cent year-on-year in the first quarter of FY 2026-27, emerging as the sharpest price increase among services tracked under India’s newly introduced Service Producer Price Index (Service PPI) framework, while price movements across other key service segments remained mixed, according to provisional data released by the Ministry of Commerce and Industry on Monday.
The Service PPI, introduced as part of the government’s new Producer Price Index framework in June 2026 with base year 2022-23, seeks to provide a systematic measure of price movements at the producer/service-provider level. The framework has been launched to strengthen India’s price statistics and improve measurement of inflation in an economy where services account for a significant share of economic activity.
Sector-wise Price Movements
Air Passenger Services
For Q1FY27, the Air (Passenger) Service Price Index rose to 126.4 from 106.9 in Q4FY26, translating into annual inflation of 31.94 per cent.
Banking Services
Banking service prices, meanwhile, remained under deflationary pressure, with the Banking Service Price Index declining 3.35 per cent year-on-year. However, the Banking Service Contribution Index rose 6.90 per cent, accelerating from 3.30 per cent in the previous quarter, with its index increasing to 134.8 from 131.5.
Pension Fund Management
Management of pension funds recorded a notable rise in prices, with its index increasing to 113.3 from 103.8 in Q4FY26. Annual inflation stood at 5.20 per cent, reversing from a 0.76 per cent decline in the previous quarter.
Insurance and Telecom Services
Insurance service prices also edged up, with annual inflation rising to 0.98 per cent from 0.68 per cent, while the index remained at 102.9.
Telecom service prices remained unchanged at an index level of 112.2, although annual inflation moderated to 0.72 per cent from 0.99 per cent in the preceding quarter.
Railway Services
Railway services recorded modest price increases, with the overall Railway Service Price Index rising to 103.4 from 103.3. Annual inflation stood at 1.27 per cent, with passenger services recording 3.50 per cent inflation and freight services registering 0.10 per cent.
About the Service PPI Framework
The government had announced in June that Service PPI would be released quarterly with a lag of 55 days from the close of the reference quarter. The Q1FY27 data were scheduled for release on August 24.
The new Service PPI is intended to gradually expand the statistical measurement of service-sector price movements and complement existing inflation indicators, including the Wholesale Price Index and Consumer Price Index, as India develops a more comprehensive producer-price measurement system. (ANI)
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