New CPI may be released by April

The Department of Economic Affairs in the Ministry of Finance has asked the Central Statistical Organisation (CSO) to expedite the proposal.

"Personally, I think the wholesale price index (WPI) completely overstates the current rate of inflation. With inclusion of services in the CPI, inflation will substantially come down. We should move from the WPI to CPI-based inflation measurement, as is the practice across the world," said Abheek Barua, chief economist, HDFC Bank.

The CPI-National will combine the CPI-Urban and the CPI-Rural. The CSO has already started working on a CPI-Urban field survey. It is expected that the index will be released by April next year.

It has reallocated staff who collect the data for the CPI for urban non-manual employees, which has now been discontinued, to work on the CPI-Urban. However, work on the proposed CPI-Rural has not started as yet due to lack of manpower.

"We are not sure about CPI-R, as we do not have the necessary manpower. I think we will be better off in tying up with state governments to collect the data. In rural areas, the person has to be present physically. States are in a better position to have data collectors at the village level," India's chief statistician Pronab Sen had recently told Business Standard.

CSO officials added that a proposal to tie up with the Department of Posts to collect price data at the retail level from villages may be considered.

Besides a separate WPI, India has different consumer price indices for well-defined population groups. The current three consumer indices are for industrial workers (CPI-IW), agricultural labourers (CPI-AL) and rural labourers (CPI-RL).

Till date, the WPI is the most widely followed measure of inflation in the country, but the recent inflationary surge and the various deficiencies in data collection and updation have put a question mark over its accuracy.