Question

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?

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 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.