A prosperity index from Central Bank

The Central Bank has devised a way to track the people’s ‘prosperity’ by devising an index - a ‘prosperity Index’ (PI) which they will be launching by end of March.

“The Central Bank is working on a PI to find out whether the people in this country are improving yearly.

This will give an indication whether the government’s endeavours at making Sri Lanka prosperous are becoming fruitful,” Ajith Nivard Cabraal, Governor - Central Bank told The Sunday Times FT on the sidelines of a seminar an ‘Micro-finance for economic development’, held recently.

He said the PI has tracked ‘prosperity’ during the last five years.

“We hope to launch this on March 31 along with our annual report for 2007,” he said. Cabraal explained the PI will track prosperity on people's livelihood, economic infrastructure, well-being of the people, etc.

“The PI is inclusive of crime rates, poverty levels, educational trends, etc,” he added.

He said they have seen an increasing trend in the PI.

“The Central Bank’s tagline is ‘towards prosperity’ and we though it was appropriate to have a PI, because you need to monitor the progress of what you do in order to make the people prosperous,” he noted.

He said the country has maintained over six percent GDP growth consecutively for the last three years. “The rupee has been ‘reasonably’ stable.

However, we need to focus not only on macro, but micro – economic development. At the micro level, there is an indication of what happens to the people where it shows the level of development of the people,” Cabraal said.

“We need to see how ‘rich’ the poor are and whether they are improving,” he said, adding that delivering credit to the lowest, rural levels of the country should be the focus.

Usha Thorat, Deputy Governor of the Reserve Bank of India who was keynote speaker at the event said it is important to bring in the unorganised, remote sector into mainstream finance.

She reiterated that substantial and sustained economic development is premeditated by micro-finance development.

“Micro-financing leads to economic empowerment where poor families are helped to take charge of their lives,” she added.