MONEY AND BANKING (Part – I)

CPI for Industrial Workers (CPI-IW), CPI for Agricultural Labourers (CPI-AL) and CPI for Rural Labourers (CPI-RL) indexes are compiled by Labour Bureau in the Ministry of Labour and Employment. While CPI for Urban Non-Manual Employees (CPI-UNME) was earlier computed by CSO, which was discontinued since April, 2008. The CPI-Urban and CPI- Rural (and CPI-Combined) Indexes are compiled by the National Statistical Office (NSO) in the Ministry of Statistics and Programme implementation.

CPI for Industrial Workers (CPI-IW), CPI for Agricultural Labourers (CPI-AL) and CPI for Rural Labourers (CPI-RL) indexes are compiled by Labour Bureau in the Ministry of Labour and Employment. While CPI for Urban Non-Manual Employees (CPI-UNME) was earlier computed by CSO, which was discontinued since April, 2008. The CPI-Urban and CPI- Rural (and CPI-Combined) Indexes are compiled by the National Statistical Office (NSO) in the Ministry of Statistics and Programme implementation.

The Consumer Price Index for Industrial Workers (CPI-IW) is compiled by the Labour Bureau under the Ministry of Labour and Employment. The base year of CPI-IW has been revised from 2001 to 2016 with effect from September, 2020 to reflect the changing consumption pattern. The job of compilation and maintenance of CPI-IW was taken over by the Central Government in 1941. After that, the Labour Bureau has been compiling and maintaining the CPI-IW since 1944. However, All India CPI-IW was first introduced on uniform and scientific lines with base year 1960 = 100 which was based on the results of Family Living Survey conducted in 1958-59. The series was then updated in 1988 on base year 1982 100 and a revision in 2006 has further updated the base year to 2001 = 100.

The Consumer Price Index for Industrial Workers (CPI-IW) is compiled by the Labour Bureau under the Ministry of Labour and Employment. The base year of CPI-IW has been revised from 2001 to 2016 with effect from September, 2020 to reflect the changing consumption pattern. The job of compilation and maintenance of CPI-IW was taken over by the Central Government in 1941. After that, the Labour Bureau has been compiling and maintaining the CPI-IW since 1944. However, All India CPI-IW was first introduced on uniform and scientific lines with base year 1960 = 100 which was based on the results of Family Living Survey conducted in 1958-59. The series was then updated in 1988 on base year 1982 100 and a revision in 2006 has further updated the base year to 2001 = 100.

Consumer Price Index for Industrial Workers (CPI-IW) is used to compensate the wages of Central Government employees. It is generally argued that WPI inflation is not an appropriate index to determine the impact of price rise on the cost of living of the common man. Rather, the Consumer Price Index for Industrial Workers (CPI-IW), which also includes selected services and is measured on the basis of retail prices, and is used to determine the dearness allowance of employees in both the public and private sectors, is the appropriate indicator of general inflation. Food items have higher weights in CPI-IW than in WPI.

In India, Consumer Price Index for Industrial Workers (CPI-IW) is used for tracking inflation and for fixing dearness allowances (DA) of employees and industrial workers.

The Wholesale Price Index (WPI) series is compiled by the Office of Economic Adviser (OEA), Ministry of Commerce and Industry, on a weekly basis, based on the price quotations collected by the official as well as non-official source agencies on selected items and commodities identified in the basket of the index.

At present, the base year for the Wholesale Price Index (WPI) is 2011-12.

The new Wholesale Price Index (WPI) series with the base 1993-94 = 100 was introduced in April, 2000 and not in April, 1998. Thus, Statement 1 is incorrect while Statements 2 and 3 were correct as per that WPI series. On 12 May, 2017 (effective from April, 2017) the base year of the Wholesale Price Index (WPI) has been revised from 2004-05 to 2011-12. In the revised WPI basket the weight of Primary articles is 22.62%, whereas the weight of fuel and power is 13.15% and weight of manufactured products is 64.23 percent.

The new Wholesale Price Index (WPI) series with the base 1993-94 = 100 was introduced in April, 2000 and not in April, 1998. Thus, Statement 1 is incorrect while Statements 2 and 3 were correct as per that WPI series. On 12 May, 2017 (effective from April, 2017) the base year of the Wholesale Price Index (WPI) has been revised from 2004-05 to 2011-12. In the revised WPI basket the weight of Primary articles is 22.62%, whereas the weight of fuel and power is 13.15% and weight of manufactured products is 64.23 percent.

The new Wholesale Price Index (WPI) series with the base 1993-94 = 100 was introduced in April, 2000 and not in April, 1998. Thus, Statement 1 is incorrect while Statements 2 and 3 were correct as per that WPI series. On 12 May, 2017 (effective from April, 2017) the base year of the Wholesale Price Index (WPI) has been revised from 2004-05 to 2011-12. In the revised WPI basket the weight of Primary articles is 22.62%, whereas the weight of fuel and power is 13.15% and weight of manufactured products is 64.23 percent.