With the countrywide 21-day lockdown to counter the impact of COVID-19 outbreak resulting in minimal transactions and data collection issues, India’s retail inflation print for March would be based on data available for 18-20 days instead of 30-31 days.
The government’s statistical officers have used simulation and imputation to compute the March inflation rate based on Consumer Price Index (Combined), details of which would be made available on the day of the data release on Monday.
Index of Industrial Production (IIP) won’t be affected given that the data is for February, the pre-lockdown phase, officials said. The IIP data for February is scheduled to be released on Thursday.
Officials said there’s no data for transactions during the lockdown phase, especially for non-essential items, due to which they have resorted to the use of imputation. Imputation is a statistical process of replacing missing data with substituted values, which in this case are likely to be prices from the previous month. “There’s no data since data collection stopped after March 18. For some other items, we have details till 20th. We are using simulation to see how we can work upon it,” a senior government official told The Indian Express.
It is learnt that field investigators were asked to collect some data for food and other essential items from whichever shop they could access instead of the designated shops usually surveyed by them. Experts are of the view that the accuracy in this case may be questionable.
“They don’t have a choice since field investigators should not be put under threat (of COVID-19). Data collection from shops other than the designated ones, however, could result in slightly different results. If the shop is in a different village or district than the designated one, then it may get the effect of difference in trade and transport margin, which varies with every region,” former Chief Statistician of India Pronab Sen said.
For non-essential items, however, they are likely to rely on imputation and use data from the previous month, resulting in a flat index value.
In the CPI basket, essential items such as food and beverages, health and fuel and light and education comprise about 63 per cent of the total weightage. The rest would be the non-essential items, for which the imputation method is going to be adopted primarily.
Officials said their statistics contemporaries are facing a similar situation globally and are adopting imputation. “Some imputation is being done. Globally they are doing it similarly. India is not the only country facing this situation,” one of the officials said.
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