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Question
Why is it essential to have different CPI for different categories of consumers?
Solution
The Consumer Price Index (CPI) in India includes the following three components:
1. CPI for Industrial Workers.
2. CPI for Urban Non-manual Employees.
3. CPI for Agricultural Labourers.
The three CIPs are calculated on regular basis to get the aggregate effect of the changes in retail prices. While the CPI for industrial workers and agricultural labourers are calculated and published by Labour Bureau, Shimla, the CPI for the urban non-manual employees is calculated and published by the Central Statistical Organisation (CSO). The rationale behind carrying out separate calculation of CPI for industrial and agricultural labourers and CPI for urban non-manual employees is that the consumption baskets of the former group (i.e. industrial workers and agricultural labourers) differs significantly from that of the later (i.e. urban non-manual employees). Thus, as the consumption pattern differs among the two groups and to assess the impact of the price change on the consumption pattern, CPI is calculated separately for each group.
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RELATED QUESTIONS
The item having the highest weight in the consumer price index for industrial workers is ______
What does a consumer price index for industrial workers measure?
Is the change in any price reflected in a price index number?
The monthly per capita expenditure incurred by workers for an industrial centre during 1980 and 2005 on the following items are given below. The weights of these items are 75,10, 5, 6, and 4 respectively. Prepare a weighted index number for the cost of living for 2005 with 1980 as the base.
|
Items |
Price in 1980 |
Price in 2005 |
|
Food |
100 |
200 |
|
Clothing |
20 |
25 |
|
Fuel and Lighting |
15 |
20 |
|
House rent |
30 |
40 |
|
Misc. |
35 |
65 |
Try to list the important items of consumption in your family.
If the salary of a person in the base year is Rs 4,000 per annum and the current year salary is Rs 6,000, by how much should his salary be raised to maintain the same standard of living if the CPI is 400?
The consumer price index for June 2005 was 125. The food index was 120 and that of other items 135. What is the percentage of the total weight given to food?
An enquiry into the budgets of the middle-class families in a certain city gave the following information:
|
Expenses on items |
Food 35% |
Fuel 10% |
Clothing 20% |
Rent 15% |
Misc. 20% |
|
Price (in Rs) in 2004 |
1500 |
250 |
750 |
300 |
400 |
|
Price (in Rs) in 1995 |
1400 |
200 |
500 |
200 |
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What is the cost of living index of during the year 2004 as compared with 1995?
Given the following data-
| Year | CPI of industrial workers (1982 = 100) | CPI of agricultural labourers (1986-87 = 100) | WPI (1993-94 = 100) |
| 1995-96 | 313 | 234 | 121.6 |
| 1996-97 | 342 | 256 | 127.2 |
| 1997-98 | 366 | 264 | 132.8 |
| 1998-99 | 414 | 293 | 140.7 |
| 1999-00 | 428 | 306 | 145.3 |
| 2000-01 | 444 | 306 | 155.7 |
| 2001-02 | 463 | 309 | 161.3 |
| 2002-03 | 482 | 319 | 166.8 |
| 2003-04 | 500 | 331 | 175.9 |
Given the following data-
| Year | CPI of industrial workers (1982 = 100) | CPI of agricultural labourers (1986-87 = 100) | WPI (1993-94 = 100) |
| 1995-96 | 313 | 234 | 121.6 |
| 1996-97 | 342 | 256 | 127.2 |
| 1997-98 | 366 | 264 | 132.8 |
| 1998-99 | 414 | 293 | 140.7 |
| 1999-00 | 428 | 306 | 145.3 |
| 2000-01 | 444 | 306 | 155.7 |
| 2001-02 | 463 | 309 | 161.3 |
| 2002-03 | 482 | 319 | 166.8 |
| 2003-04 | 500 | 331 | 175.9 |
