In news
Recently, the Labour and Employment Ministry revised the base year of the Consumer Price Index for Industrial Workers (CPI-IW) from 2001 to 2016
Key changes
- The base year has been revised to reflect the changing consumption pattern, giving more weightage to spending on health, education, recreation and other miscellaneous expenses, while reducing the weight of food and beverages.
- It was stated by the Labour Bureau that in the future, the Bureau would work towards revising the index every five years.
- The reduction in weight to spending on food and beverages indicated an increase in disposable income.
- As per the revised series, the weight to food and beverage was reduced from 46.2% to 39%, while spending on housing increased from 15.2% to 17%
- The number of centres, markets and the sample size for working-class family income and expenditure survey was all increased.
- The number of items directly retained in the index basket has increased to 463 items as against 392 items in the 2001 series
- The weight of food and beverages has declined over time whereas the weight of miscellaneous groups (health; education and recreation; transport and communication; personal care and effects; household goods and services etc.) has increased substantially under 2016 series vis-à-vis earlier series.
- The weight of the housing group has reported an increasing share over a period of time
- Before the latest revision, the series was revised from 1944 to 1949;1949 to 1960; 1960 to 1982 and 1982 to 2001
Source: The Hindu
