Kamis, 17 Desember 2009

New system for inflation rates in India

No, the government is not moving towards implementing CPI based inflation calculation, but from October onwards, instead of releasing weekly inflation figures, the full data on wholesale price index will be released only on a monthly basis.

As per the decision taken by the government, the weekly index figures will not be released for manufactured products, but will be limited to primary articles and fuels. Manufactured products have a weightage of 63.74851%, while primary articles and fuel have weightages 22.02525% and 14.22624% respectively in inflation calculation.

The government says that the practice of releasing weekly inflation rates is scrapped to curb "volatility" in the markets. But, is it a gradual shift towards adopting CPI, where CPI figures are generally released on a monthly basis?

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