National Consumer Price Index Numbers (Para 11.2.14)
It should be mandatory on Labour Bureau and Central Statistical Organisation (CSO) to revise their series preferably every five years, but not later than ten years. In the case of Consumer Price Index for Agricultural Labourers {CPI (AL)} and Consumer Price Index for Rural Labourers {CPI (RL)}, the base year should be revised five yearly, using the quinquennial NSS Consumer Expenditure Survey data.
For revision of the series, the administrative procedure should be streamlined in such a way that necessary resources are sanctioned in a time-bound manner. The exercise on revision of the base year should be completed by the concerned agencies within a one-year period preferably after the availability of the requisite data.
The procedure of allocation of weights to different centres covered under Consumer Price Index for Industrial Workers {CPI(IW)} for computation of the all-India CPI(IW) needs further examination by Technical Advisory Committee on Statistics of Prices and Cost of Living Index Number (TAC on SPCL). A similar examination should also be done for Consumer Price Index for Urban Non-Manual Employees {CPI (UNME)} series.
Increasing the present sample of 600 villages spread over 20 States selected for price collection under CPI (AL) and CPI(RL) should be examined by TAC on SPCL.
As the current CPI series does not provide changes in the prices for the entire rural and urban population since they are designed to measure the changes in the prices of goods and services consumed by specific segments of the population, there is a need to compile the CPI separately for the entire rural and urban populations. TAC on SPCL should give a methodology for compilation of CPI for rural and urban areas separately using quinquennial NSS Consumer Expenditure Survey Data for the preparation of the weighting diagram. TAC should also give a procedure for compiling a combined index based on these two indices. The existing system of price data collection should be suitably streamlined and augmented so as to provide price data for compilation of CPI for rural and urban areas.
State CPI Numbers (Para 11.3.3)
There is a need to bring uniformity of methodology in the computation of price indices compiled by the States and Union Territories (UTs) so that meaningful analysis of regional price variation can be made. TAC on SPCL should suggest measures to ensure uniformity in compilation of CPI numbers by the States and UTs.
National Wholesale Price Index Number (Para11.4.6)
In order to obtain uniformity in the collection of wholesale price data, the Office of the Economic Adviser should explore the possibility of engaging exclusive staff for a weekly collection of price data. There should be a direct system of data collection to eliminate problems of non-response in the mail method.
An Expert Committee should be constituted to go into the quality aspects of Wholesale Price Index (WPI) data. To make the system transparent, the Office of Economic Adviser should make available detailed data to other Government agencies for official use.
To capture the recent changes in industrial structure on account of liberalisation and globalisation, there is a need to have periodic revisions of WPI numbers, preferably every five years but not later than ten years. The proposed revision should bring base years of WPI and CPI numbers much closer to each other.
A separate Services Sector Index should be developed, initially as a complement to the WPI. It should be merged with the WPI, once it has stabilised and established its robustness.
The Working Group on Services Sector Index constituted by TAC on SPCL should suggest institutional mechanism for collection of requisite data for the Services Sector Index and also its periodical updation. The Group should also take into account requirements of the World Trade Organisation’s (WTO) categories as also National Accounts.
As the present WPI is an inadequate measure of inflation; there is a need for a separate index for measurement of inflation in the economy. The proposed CPI for the rural and urban areas could be used for this purpose.
State WPI Numbers (Para 11.5.2)
There is a need to bring uniformity in terms of base year, number of items, derivation of weighting diagram, data sources, etc. in the wholesale price indices compiled by the various Sates and UTs in order to make any meaningful analysis of regional variation in prices of wholesale transactions. All the State WPIs should have preferably the same base year or around that, as that of the all-India. TAC on SPCL should examine all issues including conceptual and technical difficulties in compilation of State WPI numbers.
Existing Price Collection Mechanism (Para 11.6.3)
There is a need to unify the system of price data collection in such a way that the proposed mechanism should take into account the requirements of, at least, all central agencies compiling the price indices. The proposed system should be streamlined and strengthened in such a way that effective participation of both the Central and the State Agencies is ensured. The system would also facilitate the compilation of CPI for rural and urban areas with a substantial saving on the cost of price data collection. For speedier transmission of price data, appropriate tools of information technology should be deployed.
As there is no legislation of collection of price data at present, the feasibility of bringing it under the umbrella of Collection of Statistics Act, 1953 should be explored.
