NBO to launch housing index by March’09

The Reserve Bank of India (RBI) has asked a government agency that collects statistics on the country’s housing construction activities to launch a housing start-up index by March 2009, to help it assess the impact of fiscal and monetary stimulus offered to revive the sector.

The index, to be launched by the National Building Organization (NBO) under the ministry of housing & urban poverty alleviation, will offer reliable data to RBI and other government agencies, facilitating speedy decision making.

A senior NBO official, who asked not to be named, said the index would be released on a quarterly basis. It will be made available on a monthly basis later. The base year of the index is 2003-04.
All major economies use similar indices to assess economic activity using demand and supply data on the housing sector. As housing is a sector with high forward and backward linkages, the proposed index will be useful in assessing demand and supply situations in other sectors, such as cement and steel.

An advisory committee constituted by the central bank will meet by the year-end to review the implementation of its directive, said the NBO official.

DR Dogra, deputy managing director with credit rating agency CARE, said that lack of a reliable database on housing hampered decision making in the country. The data for the proposed index would be collected on the basis of building permits issued by local authorities.

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