Over the weekend, the government released initial findings of the 2022/23 household consumption expenditure survey, the first in over a decade, showing the share of food in household spending had shrunk substantially.
The findings could lead to a decrease in the weighting of food in the CPI, which is used by the central bank to frame monetary policy.
“The government will wait for the results of the 2023/24 household consumption expenditure survey – conducted between August 2023 and July 2024 – to make changes in the CPI index,” said Pronab Sen, the head of a government panel on statistics.
As incomes increase, people are spending less on cereals, and more on processed food, clothing, health services and consumer durables, he said, referring to the survey findings.
Sen, India’s former chief statistician who is heading a panel to review the quality of data, said that before adding new items to the CPI index, a retail market survey would also be required to finalise “representative items and brands”. “This market survey could take 5-6 months. So realistically the change in the base year of the CPI index could happen only next year,” he said. The CPI index base year is currently 2012. The final report of the 2022/23 household survey will be released in two to three months, said Geeta Singh Rathore, director general of the National Sample Survey.
“The new CPI index, whenever it is released, would be more closer to the price changes in the economy,” she said.
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