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.