Assocham suggests new indices to gauge economic health

New Delhi, Nov 19 (UNI) Associated Chambers of Commerce and Industry of India has suggested seven new indicators to gauge economic health of the country to enable policy-makers take timely action in tackling rising uncertainties on account of global financial crisis.

The industry chamber listed seven indices of non-manufacturing sector, consumer confidence, quarterly unemployment rate, housing market, construction spending, business inventories, import and export prices in its concept paper "New indicators to check economic uncertainties".

It is in the prime interest of economy to have a close monitor on these activities, said Assocham president Sajjan Jindal.

It said when economy has indices of industrial production and wholesale prices, it should also index non-manufacturing sector to monitor business activities, new orders and employment. An index for service sector, accounting for 55 per cent of the GDP, will also be helpful in monitoring economic growth.

Mr Jindal said at least 8,000 to 10,000 consumers across the country should be surveyed each month to monitor their confidence level. Housing market index, he said, would help gauge not only demand for housing, but also economic momentum.

This monitor could help prevent repeat of the US housing bubble in India, he added.

Assocham chief said index of construction spending would help indicate pace of future economic activities, while unemployment rate help gauge strength of the job market which has a direct link with strength of economy.

Survey of business inventories, Mr Jindal said, is an important indicator of near-term direction of production activity and enable policy makers have a bird's eye view of consumer and industrial demand in the economy.

Index of import and export prices, Assocham said, would help policy makers keep a track on relative price trends. It also suggested compilation of prices of goods bought in India but produced abroad and of goods sold abroad but produced domestically.

UNI SAA AK GC1734