New CPI series to reflect prices at micro-level

Retail inflation stands at 6 % in Jan, according to initial data

Indians gather around stalls at a vegetable market in Ahmadabad, India, Thursday, Jan. 13, 2011. Food inflation hit its highest level in a year last month at 18.32 percent, compounding the hardships of India's hundreds of millions living in poverty. (AP Photo/Ajit Solanki)

India on Friday adopted the new Consumer Price Index (CPI) that will reflect the actual movement of prices at the micro-level. As per the new series, the CPI has increased to 106 in January from a base of 100 in 2010 (inflation of 6 per cent), but the government has chosen not to mention the inflation figure, pointing out that the exact level could be arrived only next year.

The Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation, has introduced the new series of consumer price indices for all-India, and States and union territories separately for rural, urban and combined for the purpose of intra temporal price comparison with effect from January, 2011, with 2010 as the base year.

“Indices for some States/UTs are not being released since adequate number of schedules for these States/UTs could not be received. These indices will be revised at the time of release of provisional indices for March 2011. Therefore, for one year this practice will be continued till the series gets stabilised and adequate timely receipt of price data is achieved. Since these indices are being introduced for the first time, annual inflation rates have not been compiled,” an official statement said.

The initial data showed that retail inflation stood at 6 per cent in January this year. However, inflation, as measured by the Wholesale Price Index — which remains the top benchmark — stood at 8.23 per cent in January. India is one of the few countries in the world using the WPI as benchmark. Experts say the new CPI is likely to help policymakers like the Reserve Bank of India in better framing of decisions.

The consumer indices have been released for five major groups — food, beverages and tobacco; fuel and light; housing; clothing, bedding and footwear; and miscellaneous.

As per the new data, food, beverages and tobacco went up to 108 on a national basis in January, while fuel and light were at 106. Clothing, bedding and footwear in the month under review stood at 107 while housing remained constant at 100. The miscellaneous items went up by six points to 106.

As per the new data, inflation has been the most in Kerala, Orissa and Meghalaya, where CPI overall stood at 108 in January from a base of 100 in 2010 (inflation of 8 per cent). Even richer states like Maharashtra, Gujarat, Haryana, Delhi and Punjab reported a rise of only 4-6 per cent in CPI on an annual basis during the month under review.

The article has been corrected.