12 Sep : The government is likely to introduce two new consumer price indices (CPIs) for tracking inflation by January 2011, to better reflect the consumption pattern and price movement at the retail level.
The two new indices, one each for rural and urban areas, would be calculated on a base year of 2004-05 and would be released monthly.
“The first set of CPI numbers will be from the month of January 2011, that will be two CPIs — CPI Urban and CPI Rural,” Chief Statistician T C A Anant told media.
He said that the new consumer price index will not replace the existing ones and is only in addition to what is already there.
“The data collection started last year. The current set for four CPIs will continue, this is simply an additional index,” Anant said.
He added, however, that the new indices would gradually replace the existing ones.Currently, there are various CPIs, including Agriculture Labour, Rural Labour, Industrial Worker and Urban Non-Manual Employees.
They are calculated on different base years. While CPIs for agriculture and rural labours are calculated on the base year 1986-87, that for industrial worker is on the 2001 base year. CPI for urban non-manual employees is on the base year 1984-85.
Data for CPI for rural and agriculture labours as well as industrial workers are released by the Labour Bureau, Shimla.
However, the CPI for urban non-manual employees is calculated by the Central Statistical Organisation, under the Ministry of Statistics and Programme Implementation (MOSPI).
The data for new CPI would be released by MOSPI and will be based on the National Sample Survey (NSS).
“The basket here is based on NSS, while those in the present indices are based on separate surveys conducted by different departments,” Anant said.
When asked if there would be any changes in the way of computation of the basket, he said, the sample survey in the new index would give an all-India picture of consumption.
He also said that as the base year of the new CPI would be 2004-05, it would give a new valuation to the basket.
“The obsolescence of the basket is a function of the base. CPI Index is exclusively consumer price and the weightage of food items depends upon the groups that are comprising the survey base on which the index was based,” he said.
There is a recommendation that all these indices (Wholesale price index (WPI), Index of Industrial Production (IIP) and CPI) be moved to a common base year and a common frequency of revision.
Currently, both IIP and WPI are calculated on the base year 1993-94. The move is afoot to introduce the new series of these two numbers on the base year 2004-05.