Introduction of new series of consumer price index numbers

Ambarish Mukherjee

New Delhi, June 11

The Government is "surprised and upset" over the Centre for Indian Trade Unions (CITU) move to file a complaint with the International Labour Organisation (ILO) earlier this week against the Indian Government for introduction of new series of Consumer Price Index (CPI) numbers with 2001 as the base year.

According to official sources, "First of all the ILO has no locus standi to intervene in a routine statistical exercise carried out by the Government for which an elaborate mechanism is in place for many years. And, secondly, what does a large labour organisation like CITU hope to achieve from such complaints?"

CITU has complained that the central trade unions were not consulted and the method of formulating the index is faulty.

It has urged the ILO to ask the Indian Government to set up a Consumer Price Index Review Committee and that the new series be considered only after the report of the committee is made available. CITU's objection comes on the ground that the CPI determines the dearness allowances (DA) for the workers and the new index would reduce the DA.

Government sources, however, pointed out that the trade unions were consulted and they had agreed to release the new figures.

The meeting on the decision to release the figures was held in February this year.

"The meeting was chaired by the Secretary in the Ministry of Statistics and Programme Implementation and the Director General of Central Statistical Organisation and was attended by representatives of central trade unions. The meeting recommended release of the new series," officials said.

They also pointed out that the new series with 2001 base year is qualitatively a better index than the earlier one since it is more representative in character and reflects the latest consumption pattern of industrial workers covering 78 sectors, eight more than those covered in the 1982 series.

The sample size of families covered has been increased to 41,040 in 2001 series from 32,616 in the 1982 series.

Also, the number of markets for data collection has been increased to 289 markets for 2001 series compared to 226 markets in 1982 series and, most importantly, the number of items directly retained in the index basket has been increased from 280 items in 1982 to 370 items in 2001, officials said.

(This article was published in the Business Line print edition dated June 12, 2006)
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