Frequently Asked Questions on Consumer Price Index Numbers for Industrial Workers (CPI-IW)

| May 4, 2012 | Reply
Q .1 What we mean by base year?
Ans. The index reference period is usually called the base year, it often differs both from the weight-reference period and the price reference period. This is just a matter of rescaling the whole time-series to make the value for the index reference-period equal to 100.
Q . 2 Why we need to change the base year?
Ans. In compiling index numbers the older the weights the greater is the divergence between the

Current expenditure pattern and that of the weight reference-period. Annually revised weights are desirable but being expensive feature of an index, the base year is usually changed after a few years. Normally a year during which the family budget enquiry is conducted or a period not very distant from the survey period for which reliable price data are available is adopted as the base year. A period affected by developments of serious nature such as war is not adopted as the base year because it cannot be treated as a normal year economically.

Q .3 What is the current base year used by Labour Bureau for compilation of Consumer Price Index Numbers for Industrial Workers?
Ans. Presently, CPI-IW numbers are being complied with base year 2001=100.
Q .4 How many times the base year of CPI-IW has been revised in the CPI-IW in past?

The compilation of Consumer Price Index Numbers for Industrial Workers on uniform and scientific lines was started on base 1960=100 which was revised to 1982=100 and the existing series i.e. on base 2001=100.

Q .5 Is there any plan in immediate future to revise the base year?
Ans. An exercise/proposal of Base updation of CPI-IW from the existing period 2001=100 to a more recent period is likely to be started soon.

Category: AICPIN, CPI

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