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  1. New index for retail inflation to be unveiled next month; lower weightage on food items

New index for retail inflation to be unveiled next month; lower weightage on food items

The updated index for measuring retail inflation would have a lower weightage on food items, making more space for items such as pan, tobacco.

By: | New Delhi | Published: January 23, 2015 9:55 AM
Inflation, WPI inflation, food price

The updated index for measuring retail inflation would have a lower weightage on food items. (Reuters)

An updated index for measuring retail inflation is set to be unveiled next month that would have a lower weightage on food items, making more space for items such as pan, tobacco and intoxicants, medical and education services and articles of clothing like shirts and trousers.

“The Central Statistics Office 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 Consumer Expenditure Survey (2011-12). With this revision, the gap between Price Reference Year (Base Year) and the Weight Reference Year has been minimised,” said an official release.

The first series of the index would be released on February 12 compiling the retail inflation data for January 2015. Initially a linking factor would be provided between the old and new series to carry out annual comparisons, it would be dropped from January 2016.

“The updated CPI has a revised base year and reflects the changing pattern of consumer tastes as inferred from the last consumer expenditure survey,” said a senior official.

While the weightage of food items has been decreased to 45.86 per cent from the earlier 47.58 per cent, the weightage of clothing and footwear has been increased to 6.53 per cent from the previous 4.73 per cent.

“In case of PDS items, prices of Antyodaya Anna Yojana (AAY) have also been included in addition to Above Poverty Line and Below Poverty Line prices being taken in the existing series,” said the release, adding that 11 new priced items have been added, without dropping any item, in rural sector at all India level while in urban areas, seven priced items have been dropped and 17 new priced items have been added. “The additions are largely in the clothing basket where individual clothing articles such as shirts have now been included,” said the official.

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