CPI-IW Base Year Revised From 2001 To 2016

Table of Contents

Consumer Price Index

CPI is a price index which represents the average price of a basket of goods over time.
It calculates the average price paid by the consumer to the shopkeepers.

4 types of CPI:-

It measures change in the prices of a basket of goods and services utilised by Industrial Workers.
It basically targets the average working-class family from few sectors of the economy-
Factories, mines, plantation, motor transport, port, railways, electricity generation and distribution.

Labour Minister Santosh Gangwar on Thursday released
A new series of retail inflation for industrial workers (CPI-IW) with a revised base year of 2016 against 2001 earlier.

In any inflation index, the base year is the first year of an inflation index, with an index value of 100.
Inflation indices of all other years is compared to the base year to see how prices vary.
The percentage change in this index is what an inflation measure represents.

The Consumer Price Index-Industrial workers (CPI-IW) is the single most important price statistics with financial implications.
The CPI-IW is primarily used to regulate the dearness allowance of government employees and the workers in the industrial sectors.
It is also used in the fixation and revision of minimum wages in scheduled employments besides measuring the inflation in retail prices.

Earlier, the series was revised from 1944 to 1949; 1949 to 1960; 1960 to 1982 and 1982 to 2001 since the inception of the Labour Bureau.
But now the base revision will be done every five years, Gangwar said in a statement.

The new series is more representative in character and reflects the latest consumption pattern of the industrial workers.
The number of selected markets for collection of retail price data has also been increased to 317 from 289.
The number of items directly retained in the index basket has increased to 463 items over 392 items in the old series.
The number of states/UTs has increased to 28 under as against 25 in the 2001 series

The weight of Food & Beverages has declined over time,
Whereas the weight of the miscellaneous group (Health, Education, Recreation, Transport, Communication etc) has increased substantially under the 2016 series.
The weight of the Housing Group has been increasing over a period of time.