New Delhi: Reserve Bank of India (RBI) is expected to give up its opposition to the proposal of a monthly compilation and release of inflation data, with D Subbarao moving to the central bank from the Finance Ministry, which was open to the idea of a shift in the time table of the Wholesale Price Index.
RBI had opposed the release of inflation data on monthly instead of weekly basis whereas most of the other ministries and departments had supported the shift. The Finance Ministry was also initially not too keen on the move because of the resistance from the RBI.
“Subbarao, as Secretary in the Finance Ministry, has been supportive of the monthly release of inflation data. Now that he is the RBI Governor, the central bank is expected to agree,” a senior official said.
With most of the departments, including the Planning Commission, clearing the proposal the Department of Industrial Policy and Promotion (DIPP) is expecting to move to the monthly release of the price rise data which is now keenly watched every Thursday.
The rate of price rise is expected to be released on a monthly basis by October-end or mid-November. The base year for the proposed new series would be 2004-05 and the index calculation would be based on 1,100 items instead of the present 440. In manufacturing too, the number of items would triple to about 800-900.
However, the price fluctuation in agricultural commodities would continue to be released weekly as is the practice now. The DIPP has completed the test run for agricultural items and would be undertaking the trial for manufacturing in the next one week.
“The quality of data would improve significantly once inflation is released monthly. It will also reflect the true price situation rather than a partial picture that a weekly data shows,” the official added.