January 27, 2015
Kalaivaraikalai
The Central Statistics Office (CSO)
releases Consumer Price Indices (CPI) for Rural, Urban and Combined, at
State/UTs and all India level, w.e.f. January 2011. The Base Year of this
series of CPI is 2010=100 and weighting diagrams are based on the results
of Consumer Expenditure Survey (CES) 2004-05.
2. Now the CSO is in the process of
revising the Base Year from 2010=100 to 2012=100. The weighting diagrams
have been prepared on the basis of the results of CES (2011-12). With this
revision, the gap between Price Reference Year (Base Year) and the Weight
Reference Year has been minimized. Apart from this, a number
of methodological improvements have been introduced in the revised series,
which are as follows:
Weighting
diagrams have been prepared using the Modified Mixed Reference Period
(MMRP) data of CES (2011-12), to make consistent with the
international practice of shorter reference period for most of the food
items and larger reference period for the item of infrequent
consumption/purchased. In the old series (Base Year 2010=100), Uniform
Reference Period (URP) data were used.
In
the existing series of CPI, COICOP (Classification of Individual
Consumption According to Purpose), an international standard
classification, is being followed broadly, whereas in the revised series,
it would be completely followed, except a few deviations which are necessary
for Indian context.
The
Geometric Mean, instead of Arithmetic Mean being used in the old series,
of the price relatives with respect to base prices would be used to
compile elementary/item indices.
In
case of PDS items, prices of Antyodaya Anna Yojanna (AAY) have also
been included in addition to Above Poverty Line (APL) & Below Poverty
Line (BPL) prices being taken in the existing series.
3. Due to change in the consumption
pattern from 2004-05 to 2011-12, the weighting diagrams (Share of expenditure
to total expenditure) have changed. A comparison of weighting diagrams of
the existing and revised series is given in the table below:
Table: Comparison of weighting
diagrams of the existing and revised series of CPI
4. In the CES (2011-12), some of the
items of CES (2004-05) were dropped from the schedule and a few new items were
added. Market survey was conducted to identify shops, fix specifications
and collect prices of the new items. Based on the availability of prices, a few
new items have been included in the revised series. At the same time, some of
items of the existing series have been dropped, in respect of which, prices
have not been reported for quite a long period of time. Accordingly, the number
of priced items has changed from 437 to 448 in rural and from 450 to 460 in
urban at all India level. The number of priced items varies from State to
State. If a particular item has occurred in any State, that item has been
considered in the All India item basket. In the revised series, 11 new priced
items have been added, without dropping any item, in rural sector at all India
level. In case of Urban, 7 priced items have been dropped and 17 new priced
items have been added.
5. Adopting the aforementioned
improvements in methodologies, the first series (revised) would be compiled for
the month of January 2015 and released on 12th February 2015. In order to
estimate the old series of CPI, using the revised series, a linking factor
would be provided. The year on year inflation rates for each month of 2015
would be compiled and released, with the respective press release, using the
Linking Factor. From January 2016 onwards, the inflation rates would be
compiled using the actual CPI of the revised series, as the indices for a given
month of the year 2015 and 2016.
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