Mindful of the fact that prices of services are as much a concern for consumers as that of goods, the government has decided to launch the promised service price index soon. The proposed index will not be comprehensive to start with but will include the most important services like insurance, banking, health, telecommunications and aviation, a source privy to the matter said.
A senior department of industrial policy and promotion (DIPP) official told FE that an expert committee under the chairmanship of Sriram Taranikanti, Financial Adviser, Insurance Regulatory and Development Authority (IRDA) has been formed to work out the insurance service prices index. The committee includes senior officials from DIPP, finance ministry, RBI, academicians from Indian Institutes of Management, etc.
The official said that the insurance index will be indicating the rate at which premiums for general, health and auto insurance is recording an increase or a decrease.
The committee, sources said, will also take a call on how frequently the index should be released, the source of the samples, etc. The base year for the index is likely to be 2007.
Considering that the services sector contributes around 55% of the country?s GDP, there is a long-felt need for such an index to measure the inflationary pressure caused by cost of services.
Sources say IRDA would also provide all the logistics support to the committee, which will also interact with different stakeholders of the insurance sector. Currently, the price movement of goods and commodities is gauged through WPI and CPI.
