n lation and        siness     le    7.23
     with a quarterly HPI for Mumbai city (Base 2002-         (iii) This will also show the level of non-
     03=100). Since then, it has extended its coverage               performing assets in the housing sector.
     to nine more cities, revised its base to 2010-11         (iv) And most importantly it will serve as a
     and started publishing a composite All India HPI.               realistic price index for the buyers. (At
     RBI’s quarterly HPI is based on transactions data               present a buyer has no means, to judge
     received from housing registration authorities in               whether a rise in property price was in the
     10 major cities. As per it, growth (year on year) in            offing with the general level of inflation
     housing prices after reaching a low of 3 per cent               (i.e., at WPI) in the country, or has been
     in quarter ending in March 2016, did show an                    scaled up disproportionately. Other than
     upturn with to 8.7 per cent by the first quarter of             quotes from brokers, there are no means
     2017-18.                                                        at present to evaluate the changes in price
          There are various concepts of housing price                in this sector. At present the only index
     indices, and many sources and ways for compiling                that gave some idea of housing price
     price data—both private and public. The                         changes was the CPI (IW) which being
     methodology of constructing such indices varies                 a national index did not show regional
     from country to country depending upon the                      variations.)
     use and purpose as well as the data availability. A
     Technical Advisory Group (TAG) was set up under      service Price inDex
     the chairmanship of an adviser from the Ministry     The contribution of the tertiary sector in India’s
     of Finance in 2006–07 which had members and          GDP has been strengthening for the past 10 years
     experts from public and private bodies of the        and today it stands above 60 per cent. The need
     concerned field, i.e., NHB, CSO, RBI, HDFC,          for a service price index (SPI) in India is warranted
     HUDCD, LIC Housing Finance Ltd., Labour              by the growing dominance of the sector in the
     Bureau, Dewan Housing Finance Corporation            economy.72 There is no index, so far, to measure
     Ltd., and the Society for Development Studies        the price changes in the services sector. The
     (SDS). After reviewing international best practices  present inflation (at the WPI) only shows the price
     and the methodology, sampling techniques,            movements of the commodity-producing sector,
     collection of price data for construction of real    i.e., it includes only the primary and the secondary
     estate price indices in the USA (index developed     sectors—the tertiary sector is not represented by
     by the office of Federal Housing Enterprise          it.
     Dversight), Canada (New Housing Price Index)               The need for such an index was recommended
     and the UK (Halifax Index), the TAG suggested a      by the working group (under the Chairmanship
     proper methodology for India.                        of Prof. Abhijit Sen, Member, Planning
          With an overall objective of bringing           Commission) set up to revise the WPI (1993–
     transparency in the Indian real estate market, the   94) series which was reiterated by the National
     index is expected to serve some highly important     Statistical Commission (headed by C. Rangarajan).
     and timely purposes:                                 The office of the Economic Adviser, Ministry
          (i) Whether a broker is quoting too high a      of Commerce and Industry has been making an
              price for houses in the cities.             effort to develop sector-specific service price index
                                                          for the country with the technical assistance being
         (ii) Banks/housing finance bodies will be able
                                                          received under the World Bank Assisted Economic
              to estimate only if the loan applications
              are realistic for the properties.             72.    Ministry of Finance, Economic Survey 2006–07, p. 94.