BackMonthly WPI data: Cabinet puts proposal on hold
Monthly WPI data: Cabinet puts proposal on hold
PremiumNew Delhi: The proposal to release headline inflation data once in a month has been put on hold by the government. Currently, the data is released every week.
The Cabinet Committee on Economic Affairs, or CCEA, which took up the proposal on Monday deferred a decision on the matter. The proposal was intended to make the price inflation data more accurate and credible as the current provisional weekly inflation index is released on a miniscule response rate of only 20% of the total data.
According to a senior cabinet minister who attended the meeting and spoke on condition of anonymity, the cabinet discussed the proposal for around 10 minutes. However, home minister P Chidambaram pointed out that the proposal to release two set of indices, one weekly and one monthly, may confuse people. Stand-in finance minister Pranab Mukherjee, who chaired the meeting, immediately put the whole proposal on hold.
The cabinet note prepared by the Department of Industrial Policy and Promotion (DIPP), which compiles and releases the headline inflation data, had proposed to move to a monthly inflation figure while continuing to release a weekly index for sensitive items like primary articles and fuel group items.
The proposal was initially mooted by an experts group headed by economist and Planning Commission member Abhijit Sen which was set up in 2005 by the DIPP. The group was assigned the task to come out with a new wholesale price index series as the present one with the base year 1993-94 has become outdated. Sen submitted his report last year proposing to shift the base year of the wholesale price index based inflation to 2004-05 from 1993-94 along with an expanded basket of items.
Initially, the move to change the frequency of this key data was strongly opposed by the finance ministry and the Reserve Bank of India, the two key users of the data. However, after consultations mediated by the National Statistical Commission, the apex statistical body, the two agencies agreed to the proposal.
A senior ministry of statistics and programme implementation official speaking on condition of anonymity said the new government at the Centre may take a final decision on the proposal.
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