consumer price index slideshare pptx download

consumer price index slideshare pptx download

1. IMPORTANCE of CPI

2. Delhi Election: How onion prices led to Swaraj govt’s defeat in 1998 — the last time BJP held reigns in national capital Here’s a tale of how the BJP in Delhi lost the 1998 Assembly election as an incumbent after facing voter anger of the rising onion prices

3. Trouble for Liz Truss? UK PM battles inflation as she faces possible sacking With just over a month in the office, UK PM Liz Truss is finding it difficult to stay in power. Her proposed plans have failed to calm the inflation-stricken markets or assuage lawmakers’ concerns. INDIA TODAY 15 th October 2022

4. Monetary policy: RBI cuts FY24 inflation aim to 5.1%, but flags caution on weather and geopolitical concerns The Reserve Bank of India (RBI) has downgraded the inflation outlook for the fiscal year. Even though there are cautionary signs of upward risks for food and commodity prices, the central bank has cut its inflation expectation for the year from 5.2% to 5.1%. RBI left the benchmark interest rate untouched at 6.5%, with its focus remaining on withdrawing accommodation. The inflation print is seen to remain above 4% target for this fiscal year. 8 th June 2023, Economic Times

5. Usage of CPI Role in Determining Monetary Policy Decision making related to Consumer Prices of commodities and goods Deflator for determining real value

6. CPI as deflator in National Accounts Nominal Value Real Value Inflation adjustment

7. Impact of Inflation on Government Slowdown in GDP growth rate Pressure to raise salary & other benefits increased market interest rates

8. Uniqueness of CPI

9. Comparison of the Release Dates and Level of Dissemination with other Nations Country Release date Level of dissemination of index India 12 th of the succeeding month All India Sub-group, Group, General and Consumer Food Price Indices for Rural, Urban and Combined sectors. All India Item Indices for Combined sector. State-wise Group and General Indices for Rural, Urban and Combined sectors. United States 10 th to 13 th of succeeding month CPI released for urban sector only; Group, Sub-group and Item level United Kingdom 14 th to 22 nd of succeeding month Group, Sub-group and Item level Japan 18 th to 24 th of succeeding month Sub-group and item level China 10 th to 16 th of succeeding month Limited information available in public domain Australia 27 th of succeeding month Group and sub-group level

10. Base Revision of CPI

11. Need for Base revision 2012 is too old base Basket & weights need updation International recommendation for base revision is every 5 years

12. Country wise Current base of CPI Country Current Base Argentina 2016 China 2020 France 2015 Germany 2015 India 2012 Indonesia 2018 Italy 2015 Japan 2020 Mexico 2018 Netherlands 2015 Saudi Arabia 2018 Singapore 2019 South Africa 2021 South Korea 2020 Spain 2021 Switzerland 2020

13. Dependencies of Base revision Results of HCES Market Survey Base Price Collection

14. Work done so far for Base Revision

15. Background MoSPI started CPI (Base Year 2010) in January 2011 Prices were collected from 1181 rural villages (from 582 districts) and 1114 urban markets (from 310 towns) First Base year Revision : 2012 List of villages and towns were not changed Item Baskets and weighing diagrams were revised CPI with Base 2012=100 available from January 2013 21

16. Activities related to market survey Fixing item specifications Step 1 Step 2 Step 3 Step 4 22

17. Sampling procedure 23

18. Sampling procedure - rural Starting sample size - 1400 Remaining sample - 715 Total sample after Step 2 - 1393 25 villages added Total sample after Step 3 - 1418 53 villages added Step 1 Step 2 Step 3 Step 4 Total sample after Step 4 - 1471 24

19. Sampling procedure - rural Allocation of villages to districts Villages allocated to districts as per district share of rural population within each NSS region Selection of villages Within each district, top 100 villages arranged in descending order on the basis of Census 2011 population Villages divided into four segments each with 25 villages If district allocation is more than 4, remaining villages will be selected starting from segment 1, followed by 2 and so on From each segment, allocated villages selected randomly ensuring representation from different tehsils Selected villages in a State/UT to be distributed over four weeks of a month to consider weekly variation in prices 25

20. Sampling procedure - URBAN Total no. of towns – 7747 (based on Census 2011 and updated further) Category Criteria No. of towns Process of selection 1 Population >= 75 lakh 3 Purposive selection of 53 + 17 = 70 towns 2 50 lakh =< Population < 75 lakh 2 3 25 lakh =< Population < 50 lakh 7 4 9 lakh =< Population < 25 lakh 41 5 Remaining State/UT Capitals 17 6 Other towns 7677 Stratification within State/UT 26

21. Sampling procedure - URBAN For Category 6, stratification done within State/UT Within each stratum, No. of towns (X) = P i /9,00,000 where P i is population of i-th stratum Stratum Population criteria I Towns with population more than 1 lakh but less than 9 lakh II Towns with population more than 50000 but less than 1 lakh III Towns with population more than 20000 but less than 50000 IV Towns with population less than 20000 Stratum Allocation of markets within towns I 3 II, III 2 each IV 1 27

22. Sampling procedure - URBAN Total urban markets selected from different categories of town Population/ Stratum Allocated no. of markets to each town count of towns Total markets >7500000 28 3 84 5000000 - 7500000 20 2 40 2500000 - 5000000 14 7 98 900000 - 2500000 10 41 410 capitals 6 17 102 734 Stratum I 3 78 234 Stratum II 2 71 142 Stratum III 2 100 200 Stratum IV 1 122 122 Total urban sample size 1432 28

23. Verification of villages, towns and markets 29

24. Sample verification - rural 30

25. Sample verification - urban 31

26. Sample verification of towns and urban markets 32 IMPORTANT

27. Identification of markets 33

28. LIST Of sub-groups 34 Code Sub-groups Code Sub-groups 1 Cereals and products 13 Pan, tobacco and intoxicants 2 Meat and fish 14 Clothing 3 Egg 15 Footwear 4 Milk and products 16 Fuel and light 5 Oils and fats 17 Household goods and services 6 Fruits 18 Health 7 Vegetables 19 Transport 8 Pulses and products 20 Communication 9 Sugar and confectionery 21 Recreation and amusement 10 Spices 22 Education 11 Non-alcoholic beverages 23 Personal care and effects 12 Prepared meals, snacks, sweets etc.

29. Identification of local area (Rural) Rural market of a particular village need not necessarily be located within the village boundary Different locations of shops frequented by the consumers defined as different ‘Local Area’ All these ‘Local areas’ taken together (covering the entire basket of items) form a market for the respective village 35

30. Schedule 1.1 - rural 36 Information may be ascertained from village head or local knowledgeable person Number of local areas restricted to 5 Multiple sub-groups can be mapped to same local area Care needs to be taken while mapping one sub-group to multiple local areas Objective is to restrict number of local areas in order to reduce time of price collection

31. Identifications of shops and item-shop mapping 37

32. WHICH SHOP To select? 38 Preferably permanent retail establishments Popular with majority of the population of the selected village Dealing mostly in retail transaction Charging fair prices from most of the customers Cooperation of the shopkeeper Original – most popular shop Reserve 1 and Reserve 2 – Next two popular shops

33. What to record for shops? 39 Name and address of Original, Reserve 1 and Reserve 2 shops to be recorded separately for each item Particulars should include Shop no./ House No., Name of street, any relevant landmark, Name of owner, Contact number etc. Care needs to be taken to record shop details for the purpose of future visits

34. Identification of shops and mapping of items with shops RURAL 40

35. Schedule 2.1 - rural 41 Attempts should be made to select Original, Reserve 1 and Reserve 2 shops pertaining to a particular item in one local area

36. Schedule 2.2 - urban 42 Original, Reserve 1 and Reserve 2 shops for each item will belong to the same market

37. Fixing of item specifications 43

38. Fixing of Structured Product Descriptions Objective – To fix specifications of items most popularly consumed by population Used to create detailed product specifications - identifying characteristics of individual products for which prices are to be collected Role of SPDs: “Like with Like” Comparison Fixing item specifications with sufficient details will facilitate unique identification of the items in future which is necessary to ensure that corresponding price indices reflect the real price fluctuations and are free from variation in any other parameter 44

39. Fixing of Structured Product Descriptions SPD must be the most popular specification of an item purchased in a market so that the prices collected are most representative of that area SPDs are to be fixed market wise as popularity of specifications vary across markets CPI item basket should be standardized so that spatial comparison of prices is carried out for scrutiny 45

40. Fixing of Structured Product Descriptions Eight price determining characteristics identified; all of which may not be relevant to every item Variety Branded/ Not branded Quality Size Packaging Composition/ Model Unit Quantity 46

41. Fixing of Structured Product Descriptions Variety – Most popular variety purchased in the market Branded/ Not Branded – Name of brand to be entered; if no specified brand is available or not relevant then ‘Not branded’ to be recorded Dropdown menu provided for ‘ Quality ’ – Fine, Medium and Ordinary Size – Illustrative items are clothing, footwear, electronics ( viz. , AC, TV, refrigerator, washing machine etc.) Dropdown menu provided for ‘ Packaging ’ – Packed and Loose Composition/ Model – Mostly applicable to clothing, electronics, medicine, household goods etc. Unit and quantity fixed for most of the items (not editable) 47

42. Schedule 3.1 - rural 48

43. Schedule 3.2 - urban 49

44. Some item specific illustrations 50 Shirts Variety Men’s shirt Brand Van Heusen Quality Fine Size 40 Slim fit Packaging Packed Composition/Model 100% Cotton, Full sleeve, solid colour Unit No. Quantity 1 cloth for shirt, pyjama , etc. ( metre ) Variety Cloth for shirt Brand Not branded Quality Medium Size NA Packaging Loose Composition/Model 80% polyester 20% cotton, Striped Unit Metre Quantity 2.25 airfare Variety Indigo domestic economy, 6am – 12 noon slot Brand Makemytrip Quality Medium Size NA Packaging NA Composition/Model One way Delhi to Lucknow, 15 days prior to journey Unit No. Quantity 1 Mobile phone Variety Smart Phone Brand Samsung Quality Fine Size 8 GB RAM, 128 GM internal storage Packaging Packed Composition/Model Samsung Galaxy M53 5G (without charger) Unit No. Quantity 1 Television Variety Smart Android LED TV Brand MI/Xiaomi Quality Fine Size 32 Inch display Packaging Packed Composition/Model Xiaomi TV 5A 32 HD Ready LED Panel Unit No. Quantity 1

45. Some item specific illustrations 51 Mango (variety 1) Variety Dasheri Brand Not Branded Quality Medium Size NA Packaging Loose Composition/Model NA Unit kg Quantity 1 milk (pasteurized): high fat content Variety Pasteurized, high fat content Brand Amul Quality Fine Size NA Packaging Packed Composition/Model Unit Litre Quantity 1 chips , nachos, puffs, wafers, etc. Variety Potato chips Brand Lays Quality Fine Size NA Packaging Packed Composition/Model Lays green pack Unit Gm Quantity 40

46. Some Specific cases Treatment of items when free or extra items are provided Specification should not include the free item, in case of bundled product If extra quantity provided free in case of packaged products, free quantity needs to be excluded while recording specification 52

47. Some Specific cases Electricity, water charges Total amount charged for units of consumption to be recorded - 100, 200 and 300 units Water charges (wherever applicable) Different varieties of mango, grapes, orange are introduced in the new series (because of seasonal variation) Unit and quantity are fixed for most of the items to control diversity in item specification reporting for the new series 53 4.1.01.2.2.02.1 water charges(fixed:per month) Month 1 4.1.01.2.2.02.2 water charges litre 10000

48. Some Specific cases Airfare, Rail fare Online price may be collected for items like Airfare, Rail fare Most frequently travelled domestic routes One way economy class fare, 15 days prior to journey Name of the agency/website should be clearly mentioned in the item specifications Packaged goods Priority should be given to select items which is most popular in the market Consider the unit and quantity already mentioned in the item list If specified unit-quantity does not match, record unit-quantity of popular item clearly in ‘Remarks’ 54

49. House rent survey 55

50. HOUSE rent survey Objective: To measure change in house rent paid by different segments of population over time Present coverage: only urban - 12 dwellings from each market Changes in new series - To include rural, with 8 dwellings per village Urban allocation stays same at 12 dwellings per quotation For each Original dwelling, two Reserve dwellings to be identified 56 Sector Original Reserve 1 Reserve 2 Total Rural 1471 * 8 1471 * 8 1471 * 8 35304 Urban 1432 * 12 1432 * 12 1432 * 12 51552

51. Dwelling coverage Reference survey: NSS 76 th round (July – December 2018) ------ ‘Tenurial status of dwelling’ and ‘Number of living rooms’ All dwellings to be listed in selected village and residential area adjacent to urban quotation In consonance with existing series, House Rent data to be collected from dwellings with no. of living rooms – 1, 2, 3 and 4 or more For stratification purpose , information collected on – ( i ) category of dwelling (ii) no. of living rooms 57

52. Grouping of dwellings Broad category Type Code Employer provided Provided by Central Govt. 1 Provided by State Govt. 2 Provided by Govt. undertakings 3 Provided by other employers 4 Others Private 5 58 Broad category No. of living rooms Group Employer provided 1 1 2 2 3 3 4 4 Others 1 5 2 6 3 7 4 8

53. Dwelling distribution - rural State/UT code State/UT name G1 G2 G3 G4 G5 G6 G7 G8 Total 2 2 C hhattisgarh 4 4 8 24 Gujarat 5 2 1 8 25 Daman & Diu and Dadra & Nagar Haveli 5 3 8 2 7 Maharashtra 5 2 1 8 59

54. Dwelling distribution - urban 60 State/UT code State/UT name G1 G2 G3 G4 G5 G6 G7 G8 Total 2 2 C hhattisgarh 1 1 6 2 1 1 12 24 Gujarat 1 7 3 1 12 25 Daman & Diu and Dadra & Nagar Haveli 12 12 27 Maharashtra 1 7 3 1 12

55. Selection of dwellings 61 Step 1: Listing all dwellings with category code and no. of living rooms Step 2: Fill in Block 2 with Group wise no. of listed dwellings Step 3: Decide no. of dwellings from each group based on respective State share Step 4: Draw dwellings randomly and identify them in column (7) of Block 1

56. House rent schedule 62

57. House rent schedule 63

58. House rent schedule 64

59. House rent schedule 65

60. House rent schedule 66

61. Officers of PSD, MoSPI may be contacted for any query/clarity on the following email ids: [email protected] [email protected] [email protected] 67

62. THANK YOU 68