The RBI, in March last year, had suggested the setting up of a Standing Committee to monitor the initiative's progress as well as commission and overview the surveys. Upon advice from the apex bank's technical advisory group, the National Buildings Organisation (NBO) under the housing ministry was approached to collect data on building permits issued for new residential buildings in various centres across the country.

In its second meeting held recently, the RBI's Standing Committee was apprised by the NBO about the progress made in collection of data. "Initially, we had planned to collect housing start-up data from seven Tier I cities in the country. We then decided to expand this number and have now decided to have the index representing 30 Tier I and II cities. We are on target and the first HSUI data should be released in December," said a housing ministry official on condition of anonymity. The HSUI data is to be released by the RBI every quarter.

The number of housing start-ups during a period indicate the demand and supply situation in the housing market.

The index would be a reflection of the conversion rate of building permits into actual starts. At present, only five countries — the US, the UK, Germany, Canada and Australia — have indexes on the lines of the HSUI.

The importance of these indexes was felt during the US sub-prime crisis of 2008, which mainly stemmed from the country’s construction sector, and its subsequent effect felt across the globe.

The HSUI is expected to provide information on the likely pace of economic activity. An increase in the number of housing start-ups would indicate an increase in investments, business and consumer optimism, while a decrease would signal the opposite. Activity in the housing sector has an effect on other industries such as steel and cement, besides consumer goods such as furniture and home appliances.

The official said the ministry had fully-funded HSUI cells in each of the cities to be considered in the index. The cells' membership is made up of state administrators and development authorities. "For certain cities, the ministry already had data available for housing start-ups over the past three years. For the HSUI, data has already been collected for 15 cities. The RBI will be starting sample surveys based on our data in the next 15-20 days," the official said.

The housing ministry also plans to approach the RBI for a Memorandum of Understanding (MoU) on the housing start-up index. "The MoU will put in place a time-frame for declaring the HSUI data which is acceptable to both parties. Such an MoU will, in effect, hold the state administration responsible for timely collection of data," the official said.