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To measure the core sector growth of India on a regular basis, India may soon have an infrastructure index. The infrastructure index will be based on the Wholesale Price Index (WPI) or the Consumer Price Index (CPI). It will show the growth or fall of India's infrastructure on regular basis. When Shubhashish Gangopadhyay, the advisor of Finance Minister was contacted, he confirmed these developments but also said that the idea is still at a very nascent stage.
Gangopadhyay said that some officials are working on the idea of creating such an index for the whole country. Though he agreed that such an index is required but he also added that it cannot be rolled out every week or every month. Instead, it has to be three monthly or bi-yearly. However, it is believed that the government may not espouse to such an index initially. First, it wants a private organization to manage it. Subsequently, the government may use its own index or that developed by someone else. Sources close to the the development team said that this index is being developed by a private organization and it is likely to be managed by a reputed organization before it is actually adopted by the government.
However, this thought of developing such an index on the lines of Wholesale Price Index or Consumer Price Index is somewhat different from the idea of the Infrastructure Development Finance Company (IDFC) in coaction with the FTSE group. Meanwhile, Arvind Mahajan, KPMG's executive director said that before creating such an index, choosing the right parameters is very important. He added that such an index should not only track physical assets but must also keep a record of the usage of the existing capability. To track the actual growth, he said, the index must capture the leading indicators correctly.
