Price Index For Industrial Workers To Be Updated

The finance ministry has cleared a proposal by the ministry of labour to update the 1982 consumer price index (CPI) for industrial workers. The revised index on which the dearness allowance is based, is expected to substantially enhance the wages of industrial workers.

According to a top labour ministry official, a technical sub-committee has been formed for this purpose. A total of 76 centres have been identified to conduct the survey. The last survey was conducted in 70 centres during 1981-82 for the 1982 consumer price index series in the pre-liberalisation era.

The governments move comes close on the heels of the pay commission recommendations submitted last month. The 1982 survey was embroiled in a major controversy with the central trade unions demanding its revision as they felt that it underestimated inflation.

 

The official said the introduction of new products, changes in the pattern of private consumption and changes in economic policy during the last decade had made the revision of the old index necessary. The family income and expenditure survey for the new consumer price index series will be conducted over two years.

The consumer price index is constructed on the assumption of a fixed basket of goods and services determined after a sample family income and expenditure survey is conducted among workers families during the selected base year.

Central trade union leaders have disputed many of the assumptions on which the 1982 consumer price index series was based. They point out that the series was constructed when the economy was heavily regulated and government policies provided for price control, subsidies and an extensive system of publicly provided services and goods.

In fact, while conducting the survey, a significant portion of working class population belonging to railways, public motor transport, port and docks and power sectors had also been excluded.

The weight of the food group seems to have come down in the 1982 survey. The same is true for the weight of pan, supari, tobacco and intoxicants, while the weight for clothing, bedding and footwear seems to have remained same.

Another lacunae has been the practice of collecting prices from retail shops of well-known mills and handloom co-operatives instead of those frequented by workers since most of the mill showrooms closed down over a period of time.

The survey takes into account the workers who visit hospitals run by the employees state insurance scheme. The scheme covers less than 7 million employees in the country, out of a total organised sector employment of about 28 million, the trade unions point out.

As most of these hospitals do not have enough medicines, most of the workers end up buying from retail outlets.

In other categories, although it was recommended that the units of measure for items should be those in which they are purchased by the workers, the survey has taken into account food items like curd which has been measured in kilograms and lemons in 200 grams while they are usually bought in different measures, the trade unions pointed out.