Question -
Answer -
The Consumer Price Index (CPI) in India is calculated for different categories as under
- CPI for industrial workers.
- CPI for urban non-manual employees.
- CPI for agricultural labourers.
The reason behind calculation of three different CPIs is that the consumption pattern of the three groups (i.e., industrial workers, urban non-manual workers and agricultural labourers) differs significantly from each other. Therefore, to assess the impact of the price change on the cost of living of the three groups, component items included in the index need to be given different weights for each of the group. This necessitates the calculation of different CPI for different categories of consumers.