The government will,from August,introduce a new system of inflation measurement that would cover price changes of about 250 extra items,Industry Secretary R P Singh said on Tuesday.
“We are ready with the new index now. Most probably,from next month we will start,” Singh said,adding that it would be approved by the Committee of Secretaries,headed by the Cabinet Secretary.
The present monthly inflation measurement system,based on the wholesale price index,reflects the price variations of 435 items.
“The number of commodities has gone up to something like 670… weights are accordingly arranged. This will become more reflective of inflation,” Singh said. He said the new index has been vetted by experts,and the results were found to be “quite consistent”.
As the WPI gets broadbased,the inflation based on it might even go up further from the annual 10.55 per cent for June.
The new index is likely to include a host of new products,including consumer goods such as mobile phones and LCD televisions.
Outdated items such as typewriters and video cassette recorders (VCRs) would not find a place in the new inflation measurement mechanism.
The base year of the new index would also be changed from 1993-94 to 2004-05.
The new index is expected to give a more realistic picture of the price rise and its impact on the people.