Consumer price index

Topics: Inflation, Price index, Consumer price index Pages: 22 (7240 words) Published: November 28, 2013
New Series of Consumer Price Index Numbers for Industrial Workers on base 2001=100
Labour Bureau, since its inception, has, inter-alia, been entrusted with the responsibility of compilation and maintenance of the Consumer Price Index Numbers for Industrial Workers (CPI-IW). The CPI-IW purports to measure the temporal change in the retail prices of fixed basket of goods and services being consumed by the target group i.e. an average working class family and thus, is an important indicator of the retail price situation in the country. The CPI-IW is mainly used for the determination of dearness allowance being paid to millions of Central/State Government employees as also to the workers in the industrial sectors besides fixation and revision of minimum wages in scheduled employments. The main objective of the CPI-IW (new series) was to update the base year of the previous series of Consumer Price Index Numbers for industrial workers (Base 1982=100) to 2001=100. 2.  MAIN CONSTITUENTS

Three most important constituents of the CPI-IW are the centre specific weighting diagrams, the retail price data and the house rent data. A.  Updation of Weighting diagrams
     (I)  Conduct of Income & Expenditure Survey:
            The field staff of the National Sample Survey Organisation (NSSO) through a detailed questionnaire collected the income and expenditure data in order to reflect the change in the consumption pattern of the working class population at all the 78 selected centres across the country during 1999-2000 under the overall guidance and supervision of the Labour Bureau. Detailed instructions were issued by the Labour Bureau for canvassing of schedules by the field staff in order to ensure uniformity in collection of data having emphasis on its accuracy. Besides, extensive training was imparted to the Officers/Officials of the NSSO at different places by the Labour Bureau before the launch of the actual work.        (II)  Scrutiny of Schedules:

            Two levels of scrutiny ensured the reliability and authenticity of data collected from the field. At the first level, the NSSO made elaborate arrangements for field scrutiny of canvassed schedules on the basis of field scrutiny manual circulated by the Labour Bureau. Thereafter, these schedules were again scrutinised in detail by the Labour Bureau to ensure consistency in the collected data. Discrepancies revealed during the course of the scrutiny were reconciled by referring the scrutiny points to the respective RO/SRO of the NSSO and also by making actual visits to the field.       (III)  Tabulation of data:

The responsibility for computerised processing and tabulation of data under the new series was entrusted to the Regional Computer Centre (RCC), now known as DOEACC, Chandigarh, which had undertaken this assignment earlier also under the previous series. The tabulation was done on the basis of the estimation procedure and tabulation plan duly approved by the Technical Advisory Committee on Statistics of Prices and Cost of Living (TAC on SPCL). In this regard detailed instructions were supplied to the RCC. The entire exercise which, inter-alia, included data entry, data cleaning, generation of tables at sub-sample/sector/centre levels and their validation, were completed with the active support of the Labour Bureau.     (IV)  Derivation of Weighting Diagrams:

            The weighting diagrams for the purpose of compilation of index numbers had been derived on the basis of average monthly family expenditure. The average budget derived from a family budget enquiry consisted of all items of expenditure reported by the families surveyed. These items of expenditure can be broadly divided as; (a)            Consumption Expenditure; 

(b)            Non-Consumption Expenditure; and
(c)            Capital Outlays.
Only consumption expenditure has been considered for the purpose of a weighting diagram for construction of consumer price index series...
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