NEW DELHI: The Ministry of Statistics is suggesting a significant overhaul of the housing index compilation methodology, part of the consumer price index (CPI) base revision exercise.
Housing represents a substantial segment of the CPI, contributing approximately 21.7% of expenditures in urban areas and 10.1% nationally according to the current series. “As part of the ongoing base revision, we will reassess all components of the index compilation methodology to create a more robust and durable CPI series,” stated the ministry in the newly released discussion paper.
Data on rent will now be collected monthly, replacing the previous six-month collection method. The updated series will include the Housing Index for both urban and rural sectors, moving past the old series which only covered urban areas due to a lack of imputed rent data for rural zones from the 2011-12 household consumption expenditure survey.
Rent data collection will involve 12 dwellings per urban market, depending on available rented units, while in selected villages, data will be gathered from 6 dwellings based on availability.
The discussion paper emphasizes that to mitigate distortions caused by government accommodations or employer-provided dwellings, such properties will be excluded from the index. This is essential as they do not accurately represent transactions in the actual rental market.
Housing is a vital indicator of household well-being not just in India, but worldwide, as families allocate a significant portion of their income to housing costs, whether renting or maintaining owned properties.
The Ministry of Statistics and Programme Implementation has invited feedback from experts, academics, ministries, departments, states, financial institutions, and other stakeholders regarding the proposed changes to the housing index compilation methodology.
