In-Depth Analysis of CPI-IW for Industrial Workers

Introduction to CPI-IW

The Consumer Price Index for Industrial Workers (CPI-IW) plays a vital role in measuring the relative changes in retail prices of a predefined basket of goods and services consumed by industrial workers. This index is essential for regulating wages and dearness allowance for millions of employees in India. Additionally, it aids in assessing inflation and shaping economic policies.

History and Base Years

• 1944 to 1949: Initial compilation of CPI-IW.
• 1949 to 1960: Revised base year.
• 1960 to 1982: Further revisions were made.
• 1982 to 2001: Continued updates reflecting market changes.
• 2001 to 2016: Utilization of the previous base year.
• 2016: Current base year, effective from September 2020.

Current Practices

• House Rent Surveys: Conducted bi-annually across 88 centers in India to gather house rent data.
• Monthly Indices: CPI-IW indices are released each month, with the prior month’s index published on the last day of the current month.
• Retail Price Indices: Compiled for 31 selected commodities in urban regions for 88 chosen centers, which are provided to the Ministry of Consumer Affairs for monitoring prices.

Technical Approval

The methodology and compilation processes of the CPI-IW have received endorsement from the Technical Advisory Committee on Statistics of Prices and Cost of Living (TAC on SPCL), ensuring its reliability and accuracy.

Frequently Asked Questions (FAQs)

Q1. What is the Consumer Price Index for Industrial Workers (CPI-IW)?
Answer: CPI-IW measures the changes in retail prices of goods and services consumed by industrial workers, serving to regulate wages and dearness allowance effectively.

Q2. What is the base year for the current CPI-IW series?
Answer: The current base year for CPI-IW is 2016, which has been in effect since September 2020, reflecting current economic conditions.

Q3. How often is the CPI-IW released?
Answer: The CPI-IW is released on a monthly basis, with the previous month’s index published on the last day of the current month for timely updates.

Q4. What is the purpose of the House Rent Surveys?
Answer: These surveys aim to collect house rent data semi-annually, which is crucial for compiling the Housing Index, contributing to the CPI-IW.

Q5. How are Retail Price Indices compiled?
Answer: The Labour Bureau compiles monthly Retail Price Indices for 31 selected commodities in urban areas across 88 centers, aiding the Ministry of Consumer Affairs in price monitoring.

UPSC Practice MCQs

Question 1: What is the primary function of the CPI-IW?
A) To monitor agricultural prices
B) To measure retail prices for industrial workers
C) To regulate international trade
D) To set interest rates
Correct Answer: B

Question 2: When was the current base year for CPI-IW established?
A) 2001
B) 2016
C) 2020
D) 1982
Correct Answer: B

Question 3: How frequently are the CPI-IW indices published?
A) Daily
B) Weekly
C) Monthly
D) Quarterly
Correct Answer: C

Question 4: Who approves the methodology of CPI-IW?
A) Ministry of Finance
B) Technical Advisory Committee on SPCL
C) Reserve Bank of India
D) National Statistical Office
Correct Answer: B

Question 5: How many commodities are selected for the Retail Price Indices in CPI-IW?
A) 20
B) 31
C) 50
D) 15
Correct Answer: B

Question 6: What is the main purpose of the House Rent Surveys?
A) To calculate inflation
B) To gather house rent data
C) To set wage standards
D) To monitor commodity prices
Correct Answer: B

Question 7: Which organization compiles the Retail Price Indices?
A) Ministry of Consumer Affairs
B) Labour Bureau
C) Reserve Bank of India
D) National Statistical Office
Correct Answer: B