New Delhi: A new series of Consumer Price Index for Industrial Worker (CPI-IW) with base year 2016 will now replace the existing series with base 2001=100. Santosh Kumar Gangwar,Minister of State (Independent Charge) for Labour and Employment, today released the new series of CPI-IW, being compiled and maintained by Labour Bureau, an attached office of his ministry.
The CPI-IW is the single most important price statistics, which has financial implications. It is primarily used to regulate the dearness allowance of government employees and the workers in the industrial sectors. It is also used in fixation and revision of minimum wages in scheduled employments besides measuring the inflation in retail prices.
Earlier to this revision, the series were also revised from the year 1944 to 1949;1949 to 1960; 1960 to 1982 and 1982 to 2001 since inception of Labour Bureau.The new series is more representative in character and reflects the latest consumption pattern of the industrial workers.
Gangwar said the improvements made in the PI-IW it, incorporating international standards and practices, will make it more comparable at international level. He added this will help in measurements of macroeconomic indicators of the Indian economy.
As per the recommendations of International Labour Organisation (ILO), Index Review Committee (IRC) and National Statistical Commission (NSC), the base year of price index numbers should be revised at frequent intervals generally not exceeding 10 years to reflect the changes that take place in the consumption pattern of consumers. The CPI-IW is compiled as per international best practices & guidelines of ILO.
Gangwar also released the maiden index with base year 2016 for the month of September, 2020. The Index is compiled for 88 centres and All India. The All India index for the month of September, 2020 stands at the level of 118 and linking factor for the conversion of new series index to previous series on base 2001=100 is 2.88.
Gangwar elaborated some of the important improvements made under the new series of CPI-IW (2016=100) vis-à-vis old series (2001=100)which are as under:
- A total of 88 centers have been covered in the 2016 series as against 78 centers in the 2001 series.
- The sample size for the conduct of Working Class Family Income and Expenditure Survey, on the basis of which weighting diagrams have been derived, was increased to 48384 families from 41040 in the 2001 series.
- The number of selected markets for collection of retail price data has also been increased to 317 markets under the 2016 series as against 289 markets covered in the 2001 series.
- The number of items directly retained in the index basket has increased to 463 items as against 392 items in the 2001 series.
- The number of States/UTs has increased to 28 under 2016 series as against 25 in the 2001 series.
- In the new series, as per the direction of Technical Advisory Committee (TAC) on Statistics of Prices and Cost of Living (SPCL), the Geometric mean based methodology (GM of Price Relatives) is used for compilation of indices as againstArithmetic mean used in 2001 series.
- The group level weights under new series has changed in comparison to earlier series (1982 and 2001). The weight of Food & Beverages has declinedover time whereas the weight of Miscellaneous group(Health; Education & Recreation; Transport & Communication;Personal Care & Effects; Household Goods & Services etc.) has increased substantially under 2016 series vis-à-vis earlier series. The weight of Housing Group has reported an increasing share over period of time.
- The Group-wise Index for the month of September, 2020 varies from 113 points of Housing group to 132 points of Pan, Supari, Tobacco & Intoxicants group under new series.
The linking factor of new series 2016=100 to old series of CPI-IW (2001=100) is 2.88. There are 65 common centres between both the series and the linking factor of common centers ranges from 2.38 of Doom-Dooma Tinsukia to 3.60 of Nagpur.
The All-India Consumer price Index Numbers for Industrial Workers (CPI-IW) for the month of September, 2020 is released on New Base: 2016=100. The maiden index on new base for September, 2020 stands at the level of 118 and linking factor for the conversion of new series index to previous series on base 2001=100 is 2.88.
In the new series is broader in scope and larger in perspective. The coverage widened to 88 centres against 78 centres in the previous series. Rise in number of markets from 317 collecting retail consumer prices of 463 items against 289 markets and 392 items in the old series makes it more representative in character and reflects the latest consumption pattern of the target population, i.e., industrial workers.
Unlike predecessors, the new series has same survey base year and price base which in itself is a major improvement. It is also released in the shortest time span of less than 4 years as never before.
The Technical Advisory Committee on Statistics of Prices and Cost of Living (TAC and SPCL) has approved the new series.
The next issue of CPI-IW for the month of October, 2020 will be released on Friday November 27, 2020.
In this regard, Union Labour Minister said that the revision of CPI-IW with new base covering representing latest consumption pattern of the target population will prove to be in the interest of workers in times to come.
– globalbihari bureau
