RBI index to gauge housing activity

MUMBAI/PUNE: The Reserve Bank of India is working towards starting a housing start-up index that will give an indication of the level of construction activity and the trend in home purchases.

Speaking at a seminar on the occasion of National Statistics Day in Mumbai on Friday, RBI deputy governor Rakesh Mohan, while explaining the role of statistics in policy formulation, said the central bank is looking at starting the index which will let monetary authorities gauge the level of economic activity in the country. “At present, the data is not adequate.” Mr Mohan said.

The RBI has set up a committee to formulate the modalities. Right now, municipal records are the only source of data on housing projects that are likely to come up in future.

But it is a Herculean task to collate this data from physical records. “The idea of an index is to have the data-base on housing permission in an electronic form,” said RB Barman, executive director, Reserve Bank of India in Pune.

The panel will be chaired by Professor Amitabh Kundu of JNU and will have representatives from Indian Statistical Institute (ISI), IGIDR, among others. It will give its recommendations on the start up index by the end of this year.

Investment in housing is one of the leading indicators of the performance of an economy. People tend to invest more in housing projects — both residential and non-residential — in a boom phase.

But the data-base is not structured and the challenge lies in organising this, particularly at the state level. The panel will look at issues like what kind of data will be required and how to capture this in a computerised form, said Barman.