Overhaul housing index compilation method: Statistics ministry

NEW DELHI: The statistics ministry is proposing that the housing index compilation methodology be revised significantly as part of the base revision exercise of the consumer price index (CPI).As a part of CPI, housing constitutes a major component with an expenditure share of nearly 21.7% in urban areas and 10.1% at the all-India level in the current series. “In the ongoing base revision exercise, all aspects of index compilation methodology are expected to be revisited to prepare a more robust and resilient CPI series,” the ministry has said as it unveiled a discussion paper .Rent data will be collected monthly, replacing the current practice of collecting rent every six months. The new series will compile the Housing Index for both rural and urban sectors. This marks a departure from the current series, which includes only the urban sector, due to the absence of imputed rent data for rural areas in the household consumption expenditure survey 2011-12.

Rent data will be collected from 12 dwellings per urban market, subject to the availability of rented units, and in selected villages, data will be collected from 6 dwellings, based on availability.The discussion paper says that to eliminate distortions introduced sometimes due to concessional or employer-provided dwellings as govt accommodations, such dwellings will be excluded from the compilation of the index as they do not reflect transactions in the actual rental market.Housing is a crucial indicator for the overall well-being of the households not only in India but across the world as a significant amount of their income is spent either on house rent or maintaining an owned house.The ministry of statistics and programme implementation has invited views and comments from experts, academicians, ministries, departments, states, financial institutions and other stakeholders on the proposed housing index compilation methodology.