Question

Given the following data:

Year	CPI of Industrial Workers (1982 = 100)	CPI of Agricultural Labourers (1986-87 = 100)	WPI (1993-94 = 100)
1995–96	313	234	121.6
1996–97	342	256	127.2
1997–98	366	264	132.8
1998–99	414	293	140.7
1999–00	428	306	145.3
2000–01	444	306	155.7
2001–02	463	309	161.3
2002–03	482	319	166.8
2003–04	500	331	175.9

Source: Economic Survey, 2004-2005, Government of India

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

(ii) Are they comparable?

Answer 1

(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 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

c)

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

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.

(ii) 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.