7.16         ndian      onom
           This index is used for revising minimum wages          (Rural); CPI (Urban) and by combining them
     for agricultural labourers in different states. As the       into a ‘national’ CPI-C (where ‘C’ stands for
     consumption pattern of agricultural labourers has            ‘Combined’). Meanwhile, the data for the existing
     changed since 1986–87 (its base year), the Labour            four CPIs were also being published by the CSO.
     Bureau proposes to revise the existing base year             The base year was also revised from the existing
     of this index. For the revision, the consumer                2004–05 to 2010–11.
     expenditure data collected by the NSSO during                     In February 2015, the CPI was again
     its 61st NSS Round (2004–05) is proposed to be               revised by the CSO. Together with changing the
     used.                                                        base year, in this revision, many methodological
           The governments at the Centre and states               changes have been incorporated, in order to
     remain vigilant regarding the changes in this index          make the indices more robust. The major changes
     as it shows the price impact on the most vulnerable          introduced in the revised series are as given below:
     segment of the society, this segment spends almost                1. The base year has been changed from
     75 per cent of its total income on the purchase of                    2010=100 to 2012=100.
     food articles. Governments’ failure to stabilise the              2. The basket of items and their weighing
     index in the long range can make them politically                     diagrams have been prepared using
     volatile and be translated into political debacles.                   the Modified Mixed Reference Period
     That is why the FCI is always kept ready to supply                    (MMRP) data of Consumer Expenditure
     cheaper foodgrains in the situations of any price                     Survey (CES), 2011–12, of the 68th
     rise.                                                                 Round of National Sample Survey (NSS).
     4. CPI-RL                                                             This has been done to make it consistent
                                                                           with the international practice of shorter
     There is yet another Consumer Price Index for the                     reference period for most of the food
     Rural Labourers (CPI-RL) with 1983 as the base                        items and longer reference period for the
     year, data is collected at 600 villages on monthly                    items of infrequent consumption. The
     frequency with three weeks time lag, its basket                       weighing diagrams of old series of CPI
     contains 260 commodities.                                             were based on the Uniform Reference
           The agricultural and rural labourers in India                   Period (URP) data of CES, 2004–05, of
     create an overlap, i.e., the same labourers work as                   the 61st Round of NSS.
     the rural labourers once the farm sector has either                      With this change in the weighing
     low or no employment scope. Probably, due to this                     diagrams, the gap between Weight
     reason this index was dropped by the government                       Reference Year and Price Reference Year
     in 2001–02.45 But after the government change at                      (Base Year), which was six years in the old
     the Centre the index was revived again.46                             series, has now been reduced to six months
                                                                           only. Due to change in the consumption
     revision in the cPi                                                   pattern from 2004–05 to 2011–12, the
     It was in 2011 that the government announced                          weighing diagrams (share of expenditure
     a new Consumer Price Index (CPI) – CPI                                to total expenditure) have changed.
                                                                           A comparison of weighing diagrams
       45.   Ministry of Finance, Economic Survey 2001–02, p. 91.
                                                                           of the old and revised series is given in
       46.   Ministry of Finance, Economic Survey 2006–07, p. 90.
                                                                           Table 7.2.