n lation and       siness     le    7.15
     Ta le 7.1
              Major Group / Group                       Weight                   No. of items             No. of Quotations
                                                2004–05       2011–12        2004–05       2011–12      2004–05      2011–12
       All Commodities                           100.00        100.00          676            697         5482         8331
       Primary Articles                           20.12         22.62          102            117          579          983
       Fuel & Power                               14.91         13.15           19             16           72          442
       Manufactured Products                      64.97         64.23          555            564         4831         6906
     consumer Price inDex                                             allowance (DA) is announced twice a year. When
                                                                      the Pay Commission recommends pay revisions,
     Other than the WPI, India also calculates inflation
     at the consumer level, similar to all the economies              the base is the CPI (IW).
     of the world. As consumers in India show wide                    2. CPI-UNME
     differentiation of their choice of consumption,
     purchasing powers. etc., a single consumer price                 The Consumer Price Index for the Urban Non-
     index (CPI) has not been possible yet which can                  Manual Employees (CPI-UNME) has 1984–85
     encompass all the Indian consumers.42                            (first base year was 1958–59) as the base year and
           Depending upon the socio-economic                          146–365 commodities in the basket for which
     differentiations among consumers, India has four                 data is collected at 59 centres in the country—
     differing sets of CPI with some differentials in the             data collection frequency is monthly with two
     basket of commodities allotted to them. Though these             weeks time lag.44
     four types of CPIs is proposed to be withdrawn in                     This price index has limited use and it is
     coming times, data for them are still released. A brief          basically used for determining dearness allowances
     account of the four CPIs are as under:                           (DAs) of employees of some foreign companies
     1. CPI-IW                                                        operating in India (i.e., airlines, communications,
                                                                      banking, insurance, embassies and other financial
     The Consumer Price Index for the industrial                      services). It is also used under the Income Tax
     workers (CPI-IW) has 260 items (plus the services)               Act to determine capital gains and by the CSO
     in its basket with 2001 as the base year43 (the first
                                                                      (Central Statistical Organisation) for deflating
     base year was 1958–59). The data is collected at
                                                                      selected services sector’s contribution to the GDP
     76 centres with one month’s frequency and the
                                                                      at factor cost and current prices to calculate the
     index has a time lag of one month.
                                                                      corresponding figure at constant prices. Since the
           Basically, this index specifies the government
                                                                      publication of the CPI (U) started the index was
     employees (other than banks’ and embassies’
                                                                      discontinued with from January 2011.
     personnel). The wages/salaries of the central
     government employees are revised on the basis of                 3. CPI-AL
     the changes occurring in this index, the dearness
                                                                      The Consumer Price Index for Agricultural
       42.   The economies of the Euro-American region have a         Labourers (CPI-AL) has 1986–87 as its base year
             single CPI as the majority of consumers show the same
             consumer behaviour (see J.B. Rosser and M.V. Rosser,     with 260 commodities in its basket. The data is
             Comparative Economics in a Transforming World            collected in 600 villages with a monthly frequency
             Economy (Cambridge USA: Prentice Hall, MIT Press,        and has three weeks time lag.
       43.   Ministry of Finance, Economic Survey 2006–07, p. 90.       44.   Ministry of Finance, Economic Survey 2001–02, p. 90.