Given the following data:

Year

CPI of Industrial

Workers

(1982 = 100)

CPI of Urban

Non-manual

Employees

(1984-85 = 100)

CPI of Agricultural

Labourers

(1986-87 = 100)

WPI

(1993-94 = 100)

1995–96

313

257

234

121.6

1996–97

342

283

256

127.2

1997–98

366

302

264

132.8

1998–99

414

337

293

140.7

1999–00

428

352

306

145.3

2000–01

444

352

306

155.7

2001–02

463

390

309

161.3

2002–03

482

405

319

166.8

2003–04

500

420

331

175.9

Source: Economic Survey, Government of India 2004-2005

 

(i) Calculate the inflation rates using different index numbers.

(ii) Comment on the relative values of the index numbers.

(iii) Are they comparable?

(i)

a)

 

Year

CPI of Industrial

Workers

(1982 = 100)

Inflation Rate

(in %)

1995–96

313

1996–97

342

1997–98

366

1998–99

414

1999–00

428

2000–01

444

2001–02

463

2002–03

482

2003–04

500

 

b)

Year

CPI of Non-manual Employees

(1984-85 =100)

Inflation Rate (in %)


 

1995–96

257

1996–97

283

1997–98

302

1998–99

337

1999–00

352

2000–01

352

2001–02

390

2002–03

405

2003–04

420

 

c)

Year

CPI of Agricultural Labourers

(1986-87=100)

Inflation Rate (in %) 

1995–96

234

1996–97

256

1997–98

264

1998–99

293

1999–00

306

2000–01

306

2001–02

309

2002–03

319

2003–04

331

 

d)

Year

WPI

(1993-94 =100)

Inflation Rate (in %) 

1995–96

121.6

1996–97

127.2

1997–98

132.8

1998–99

140.7

1999–00

145.3

2000–01

155.7

2001–02

161.3

2002–03

166.8

2003–04

175.9

 

(ii) The inflation rate for industrial worker with the base year 1982 is the highest and WPI with the base year 1993-94 has the least.

 

(iii) No, the index numbers are not comparable because of the following reasons:

  1. Base periods for CPI of industrial workers, urban non-manual workers, agricultural labourers and WPI are different.
  2. Commodities and their weightage given to different index may vary from one index number to another.

 

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