CPI method of calculating inflation

CPI method of calculating inflation

Rajya Sabha 

Government does not propose to change the method of calculation of Inflation based on the Wholesale Price Index (WPI), which is being published on weekly basis regularly since 1947. 

According to available information, 157 countries use the Consumer Price Index (CPI) to track inflation, while the WPI is used by 24 countries including India. 

The reason why India does not switch over to CPI method of calculating inflation is because we do not have an aggregate CPI, but only four sectional CPIs compiled at the National level. These are Consumer Price Index for Industrial Workers (CPI-IW), Consumer Price Index for Agricultural Labour (CPI-AL), Consumer Price Index for Rural Labour (CPI-RL) and Consumer Price Index for Urban Non-Manual Employees (CPI-UNME). The National Statistical Commission (2001) has recommended that the Central Statistical Organisation (CSO) compile a national consumer price index by computing the CPI (Urban) and CPI (Rural) separately and then combining together into an All India Index. Data collection for CPI (Urban) has commenced. 

This information was given by Minister of State for Finance, Shri Namo Narain Meena in written reply to a question raised in Rajya Sabha today.