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Coming, an inflation index for cities

On the way is a new index for measuring the urban cost of living — one that will give urban India a more accurate sense of how prices are changing. Amitava Sanyal reports.

business Updated: Jun 01, 2008 11:50 IST
Amitava Sanyal

If you feel the current price rise is hurting you more than what the official 8-odd per cent rate of inflation seems to suggest, here’s a reason. Inflation is calculated on the basis of wholesale prices of essentials, not the prices that you pay as a retail consumer. Nor does the government estimate take into account the cost of services — laundries, drivers, taxis, domestic help, etc.

The good news is, things are about to change. On the way is a new index for measuring the urban cost of living — one that will give urban India a more accurate sense of how prices are changing.

The Central Statistical Organisation, the central coordinator of statistical indices, has started collecting data from last April for a ‘Consumer Price Index-Urban’ (CPI-U) covering 1,114 items of common urban use. The data has been collected from 310 towns and cities, and put under 250 weighted categories. The government hopes to start releasing the monthly index for each state and for the country as a whole from April 2009, said Pronab Sen, Chief Statistician of India.

The new index would take into account costs of services used every day, said GM Boopathy, who as deputy director-general of the CSO was instrumental in structuring the index.

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