The ministry of statistics and programme implementation (MoSPI) has undertaken a complete revamp of the consumer price index (CPI) to better calculate the trend of consumer prices. Under the new methodology, the CPI for urban areas will replace the existing consumer price index for urban non-manual employees. The new statistical system may be used to calculate inflation by the middle of the next year.
The CPI?Urban is expected to replace the wholesale price index (WPI). According to MoSPI secretary Pronab Sen, the WPI doesn?t not reflect exact consumer prices. ?It is a fact that WPI does not reflect consumer prices. One needs to look at the CPI, which is announced every month, to see price behaviour at the consumer-end?, Sen had said.
The country has a multitude of different indices for industrial workers, rural workers, urban non-manual employees and agricultural workers. Now the government plans to have only two sets of CPI numbers ? one for urban workers and the other for rural workers.
?The basic work is done. The data collection methodology is being finalised. For the urban CPI, we will begin data collection by April 2008, but for rural areas, it is a problem, as data is needed from 1,000 villages and we have a shortage of field staff,? Sen told FE.
The CPI (Urban) will be compiled for a year before it is formally adopted, so that there is ?empirical evidence? to compare with later numbers. ?The key challenge with compiling the CPI is the continuity of manpower. Since the products are so tightly defined, you cannot have people who collect the data, changing all the time,? Sen pointed.
