From the Islamic finance industry perspective, an important criterion for the industry wide adoption of any benchmark, particularly one that is published every business day, is the simplicity, reliability and robustness of its methodology.
Economic Growth Rate as Benchmark for Islamic Finance
Growth rate of Gross Domestic Product (GDP) is one of the most frequently suggested alternative for Islamic finance transactions. GDP measures value of production in a given year. This alternative avoids reference to interest based benchmarks and reflects pure economic activities in a comprehensive way covering output of all sectors plus prices.
Using Rental Index in Fixed Assets Finance
In lease based contracts, such as Ijarah and Diminishing Musharakah, the rental indices can capture the true essence of pricing as per the nature of transaction.