The Ministry of Statistics and Programme Implementation (MoSPI) recently released a discussion paper on the housing index, which has sparked much debate and discussion among experts. The paper, titled “Housing Index: A Comprehensive Measure of Housing Prices”, has raised some interesting points and has been met with mixed reactions. One of the key highlights of the paper is the suggestion that covering all dwellings each month may not be a feasible idea. In this article, we will delve deeper into this statement and explore the reasons behind it.
Firstly, let us understand what the housing index is and why it is important. A housing index is a measure of the change in prices of residential properties over a period of time. It is an important indicator of the health of the real estate market and is used by policymakers, investors, and homebuyers to make informed decisions. The housing index is also crucial for the government to formulate policies related to housing and to monitor the impact of these policies.
The MoSPI discussion paper proposes a comprehensive housing index that covers all types of dwellings, including both urban and rural areas. This is a commendable effort as it aims to provide a more accurate reflection of the housing market in the country. However, the paper also acknowledges the challenges in implementing such an index, especially the feasibility of covering all dwellings each month.
One of the main reasons cited in the paper is the lack of reliable data on housing prices in rural areas. Unlike urban areas, where there are established systems for property registration and valuation, the process is not as streamlined in rural areas. This makes it difficult to obtain accurate and timely data on housing prices, which is essential for a comprehensive housing index. In addition, the paper also highlights the high cost and time involved in collecting data from all dwellings each month, which may not be feasible for a developing country like India.
Moreover, covering all dwellings each month may not be necessary for an effective housing index. As the paper suggests, a sample survey approach may be more practical and cost-effective. This means collecting data from a representative sample of dwellings, which can provide a reliable estimate of the housing market as a whole. This approach is widely used in other countries and has proven to be effective in capturing the trends in the housing market.
It is important to note that the discussion paper does not dismiss the idea of a comprehensive housing index altogether. It simply suggests that covering all dwellings each month may not be a feasible option at this point in time. The paper also proposes alternative methods for data collection, such as using data from government schemes like the Pradhan Mantri Awas Yojana, which can provide valuable insights into the housing market.
The MoSPI discussion paper has sparked a healthy debate among experts, with some advocating for a comprehensive housing index and others supporting a sample survey approach. However, what is commendable is that the paper has brought to light the challenges and limitations in implementing a housing index in a diverse and dynamic country like India. This will help in finding more practical and effective solutions for measuring housing prices in the future.
In conclusion, the MoSPI discussion paper on the housing index has raised some valid points regarding the feasibility of covering all dwellings each month. While a comprehensive housing index is desirable, it may not be practical at this point in time. The paper has also proposed alternative methods for data collection, which can provide reliable estimates of the housing market. It is now up to the policymakers to carefully consider these suggestions and come up with a robust and effective housing index that can accurately reflect the state of the housing market in India.
