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Service PPI inflation rises across key segments in Q1FY27; Air Passenger Service leads
Aug-24-2026

The provisional estimates of Service Producer Price Indices (PPI) (Base Year 2022-23) for Q1 of FY 2026-27 (FY27) showed that inflation rate in Air Service recorded highest rate of price rise among the seven major services. Air (Passenger) Service Price Index inflation jumped to 31.94% at 126.4 in Q1FY27 as compared to 95.8 in Q1FY26. This is a highest rate of price rise among the seven major services. Besides, inflation rate in Banking Service Contribution Index increased to 6.90% at 134.8 in Q1FY27 over 126.1 in Q1FY26. Similarly, inflation rate in Management of Pension Funds Service Price Index was up by 5.20% to 113.3 in Q1FY27 over 107.7 in Q1FY26.

As per the data, inflation rate in Railway Passenger Service Price Index and Railway Freight Service Price Index increased by 3.50% and 0.10% respectively, in Q1FY27. Moreover, inflation rate in Railway Service Price Index rose by 1.27%, Insurance Service Price Index gained by 0.98% and Telecom Service Price Index was up by 0.72%. However, there was deflation in Banking Service Price Index at 3.35% to 100.9 in Q1FY27 over 104.4 in Q1FY26. Also, Securities Transaction Service Price Index was deflation at 1.32% to 89.9 in Q1FY27 over 91.1 in Q1FY26. 

Service PPI measures the change in the average prices received by producers on production of a service. 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.

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