11.3.1 Different States and Union Territories are also collecting price data and compiling various price indices on very old base years. There are only 19 States and UTs, which are constructing CPI numbers, pertaining to one segment or the other. Among the 19 States and UTs, which are engaged in compilation of CPI numbers, there are only five States with a base year 1981-82 or thereafter for the CPIs. For instance, the oldest base year is 1939, the latest being 1988-89. Thus, there is a wide variation among the base years of State series. Further, there is a diversity not only in the segments of the population for which CPI numbers are being compiled, but also in the number of representative items included in the item basket, periodicity and data sources. Information indicating the details of collection of price data and compilation of indices by various States and UTs has been presented in Annexe 11.4 and Annexe 11.5.
11.2.9 An urban non-manual employee is defined as one who derives 50 per cent or more of his or her income from gainful employment on non-manual work in the urban non-agricultural sector. The current CPI(UNME) series with base 1984-85, introduced in November 1987, derives the weighting pattern from the family living survey conducted during 1982-83 in 59 selected urban centres. All-India weights of CPI(UNME) at group and sub-group levels are given in Annexe 11.2. Centres were selected keeping in view, (a) concentration of the UNME population at the centre, (b) inclusion of State capital cities, and (c) regional representation. The centres were allocated to different States broadly in proportion to their 1981 urban population with the limitation that not more than five centres were allotted to any State. For compilation of CPI(UNME), retail prices in respect of the selected items and services from selected markets in the 59 centres are collected by FOD on a monthly basis. The index is being released by CSO with a time lag of about two weeks. Some of the State Governments, public and private sector undertakings, foreign embassies, etc. are making use of this index for purposes of regulating Dearness Allowance. The index is also used for computing the advance tax liability of tax payers from capital gains by the Central Board of Direct Taxes.
11.3.2 The indices being compiled by the various States lack uniformity in their base year, item basket, periodicity, segments of population, method of compilation and the sources of data, and as such it is not possible to undertake a proper analysis of regional or State-level price variations based on such indices.
Conclusions and Recommendations.
11.3.3 States and Union Territories compile Consumer Price Indices catering to a specific segment of the population. Some of them also compile CPI numbers for rural and urban areas. These index numbers vary not only in base year but also in geographical and population coverage, item basket, periodicity and sources of data used. The Commission, therefore, recommends that:
There is a need to bring uniformity of methodology in the computation of price indices compiled by the States and UTs so that meaningful analysis of regional price variation can be made. TAC on SPCL should suggest measures to ensure uniformity in compilation of CPI numbers by the States and UTs.