The proposed shift to monthly data collection from every dwelling, as suggested by a MoSPI Discussion Paper (DP) on housing index compilation methodology, would impose an avoidable burden on the exchequer and respondents alike, without a commensurate increase in informational value, according to a Technical Report by IIT Bombay.
The aforementioned DP is part of the ongoing exercise by the Ministry of Statistics and Programme Implementation (MoSPI) to revise the Consumer Price Index (CPI) base from 2012 to 2024.
CPI provides a measure of inflation that is prescribed under statute to be used by the Reserve Bank of India (RBI) for the conduct of monetary policy.
“Covering all dwellings each month is not a good idea.Given that the house rentals do not change every month, the proposal to collect rent data monthly from the entire sample of over 25,000 dwellings (as against a panel survey covering just about 4,000 dwellings per month) will lead to a sharp upsurge in the cost of price collection, putting an avoidable burden on the national exchequer; and raise respondent burden and fatigue,” per the Report.
Further, the Report’s authors—Praggya Das, former Adviser-in-Charge, Monetary Policy Department, and Former Secretary to the Monetary Policy Committee, Reserve Bank of India, and Ashish Das, Professor, Department of Mathematics, IIT Bombay—noted that the aforementioned exercise will substantially increase the workload of price collectors; and have no significant gain in information as against a rolling sample of six months.
Moreover, it will risk compromising the data quality if each sample dwelling is not actually visited every month by the price collectors and instead proxies are used.
Housing service is a major component in CPI, with this service being measured by MoSPI only for the urban areas.
Housing service carries a significant weight of 10.07 per cent in the overall CPI and a commanding 21.67 per cent in the urban CPI—that is, more than a fifth of the total expenditure of an urban consumer goes for housing.
With respect to housing, some of the changes proposed such as (i) expanding the coverage of housing indices to include rural areas, (ii) using Census 2011 data for deriving weights for categorisation of dwelling types, (iii) dropping employer-provided residences from the sample of dwellings selected for rent collection, and (iv) releasing item level indices for states, the authors’ noted that these will immensely benefit policy making.
Praggya Das and Ashish Das underscored that the current methodology for house rent index compilation, using a panel-based six-month moving survey approach, apart from being a standard international practice, is robust and transitive.
They noted that the proposed method of collecting rental data from the entire sample every month, as against the six-panel moving survey, is based on MoSPI’s perceptions about the methodological drawbacks of the extant panel-based approach for the housing index compilation.
“Our view is that the new and significantly different method proposed by MoSPI of visiting over 25,000 sample dwellings each month, under the premise that the extant housing index compilation method is defective, will be sub-optimal in various aspects.
“Theoretically, the current panel-based housing index methodology has a lot of merits. We may, therefore, continue with the current house rent index compilation methodology. As it is said, ‘if it ain’t broke, don’t fix it’,” the authors said.
Published on December 18, 2025
