Description

Copyright infringement not intended

Picture Courtesy: https://indianexpress.com/article/business/why-have-timings-for-release-of-cpi-inflation-and-iip-data-been-advanced-and-the-likely-problems-with-this-change-9656069/

Context:

The Ministry of Statistics and Programme Implementation (MoSPI) has announced new timing for the release of CPI (Consumer Price Index) and IIP (Index of Industrial Production) data.

Details

The Ministry of Statistics and Programme Implementation (MoSPI) announced new timings for monitoring retail inflation and factory output data, which were earlier provided at 5:30 p.m. on the 12th of each month, now will be released released at 4 pm.

The Ministry stated that the change in data release timings is being made "to allow more time on the day of release to access CPI (Consumer Price Index) and IIP (Index of Industrial Production) data."

Consumer Price Index (CPI)

It monitors changes in the retail prices of goods and services purchased by households for daily consumption.

The four types of CPI in India are:

CPI for Industrial Workers (IW)
CPI for agricultural laborers (AL
CPI for Rural Workers (RL)
CPI (rural/urban/combined)

The first three forms of CPI (IW, AL, RL) are compiled by the Labour Bureau of the Ministry of Labour and Employment. The National Statistical Office (NSO) within the Ministry of Statistics and Programme Implementation compiles the CPI (Rural/Urban/Combined), data released every month.

The base year for CPI calculations is 2012. However, the Ministry of Labour and Employment announced a new series of CPI for Industrial Workers (CPI-IW) with 2016 as the base year.

It is calculated by comparing the cost of a fixed basket of goods and services in the current year to the cost in the previous year.

Index of Industrial Production (IIP)

It is an index that analyzes the growth rates of various sectors such as manufacturing, mining, and energy over a given time period.

The Central Statistical Organisation (CSO) analyzes and publishes IIP data every month.

The IIP's base year was updated to 2011-12 from 2004-05 in 2017.

It is a composite indicator that tracks the growth rate of industry groupings divided into broad sectors like mining, manufacturing, and electricity, as well as use-based sectors like primary goods, capital goods, intermediate goods, and consumer durables.

The IIP comprises eight core industries: electricity, steel, refinery products, crude oil, coal, natural gas, cement, and fertilizers. These industries account for 40.27% of the IIP.

The Index of Eight Core Industries (ICI) is published by the Office of the Economic Adviser (OEA) within the Department for Promotion of Industry and Internal Trade (DIPP) of the Ministry of Commerce and Industry.

Must Read Articles:

IIP

Consumer Price Index (CPI)

Source:

Indian Express

PRACTICE QUESTION

Q.Consider the following statements in the context of the Consumer Price Index (CPI):

1. It is used for indexing the dearness allowance to employees for increase in prices.

2. Consumer Price Index data is released by the Ministry of Food Processing Industries.

Which of the above statements is/are correct?

A) 1 only

B) 2 only

C) Both 1 and 2

D) Neither 1 nor 2

Answer: A

Explanation:

Statement 1 is correct:

Consumer Price Indices (CPIs) track changes in the overall level of prices for goods and services at households level. It is widely used as a macroeconomic inflation indicator by governments and central banks to manage inflation and monitor price stability. CPI is used to index employees' dearness allowances in response to price increases.

Statement 2 is incorrect:

The Ministry of Statistics and Programme Implementation (MoSPI) presently releases the Consumer Price Indices (CPIs) on the 12th of every month at 5:30 PM.