Consumer Price Index for Industrial Workers Revised : Daily Current Affairs

Consumer Price Index for Industrial Workers Revised

The Labour and Employment Ministry revised the base year of the Consumer Price Index for Industrial Workers (CPI-IW) from 2001 to 2016 to reflect the changing consumption pattern.

The Consumer Price Index (CPI) is a measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care. It is calculated by taking price changes for each item in the predetermined basket of goods and averaging them.
The Labour and Employment Ministry revised the base year of the Consumer Price Index for Industrial Workers (CPI-IW) from 2001 to 2016 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.
CPI-IW is a vital economic indicator which measures the changes in prices of goods and service consumed by the index population.

The new series, representing the latest consumption pattern, would be in the interest of workers. The number of centres, markets and the sample size for working class family income and expenditure survey were all increased.
The Minister also released the first index, with 2016 as the base year. The index for September, calculated for 88 centres as opposed to the previous 78 centres, was 118.
The weight to food and beverage was reduced from 46.2% to 39%, while spending on housing increased from 15.2% to 17%.
As per the latest data, year-on-year inflation (CPI-IW) stood at 5.63% for August compared with 5.33% for July and 6.31% recorded in August 2019.

In India, there are four consumer price index numbers, which are calculated, and these are as follows:

CPI for Industrial Workers (IW)
CPI for Agricultural Labourers (AL)
CPI for Rural Labourers (RL) and
CPI for Urban Non-Manual Employees (UNME).
While the Ministry of Statistics and Program Implementation collects CPI (UNME) data and compiles it, the remaining three are collected by the Labour Bureau in the Ministry of Labour.

Apart from measuring inflation in retail prices, the CPI-IW was used to regulate the DA of government employees and industrial workers, as well as fixing and revising minimum wages in scheduled employments.
Changes in the CPI are used to assess price changes associated with the cost of living. The CPI is one of the most frequently used statistics for identifying periods of inflation or deflation.