11.6 Existing Price Collection Mechanism

  • 11.6.1 The data on prices are regularly collected by Central and State Government Departments and agencies for varied purposes. These data basically form the source of varied information compiled in different forms in accordance with the specific needs of multiple agencies. Though efforts are being made to ensure the correctness and reliability of price data being collected by various agencies by introducing multi-tier supervision, yet the quality of data has been questioned at various forums on account of various reasons, such as:
    • Involvement of multiple data collection agencies
    • Use of varying concepts and definitions
    • Non-existence of an exclusive field agency
    • Non-standard specifications
    • Repetition of prices due to non-response, and
    • Meagre honorarium for data collectors.
  • 11.6.2 The Committee of Secretaries observed that it may be advisable to use the same primary price data collected and collated by a standardised system to develop price index series for different segments of the population as well as for the entire rural and urban areas. The Committee finally decided that the two series of price data for urban and rural areas should be developed and the same data should be used for developing different price indices including those, which are currently published. In this context, a Sub-group of TAC on SPCL, has been constituted to recommend measures for improvements in the calculation of the WPI which include the strengthening of price data collection system, development of business services price index, etc. The Sub-group has already deliberated the various issues in detail and expressed a need to provide adequate resources for streamlining and strengthening the data collection mechanism, which would improve both the extent and quality of response. The group also felt that regular and systematic monitoring of price collection mechanism was necessary. For the purpose, the association of both Central and State Agencies is imperative. There is a need to undertake measures for speedier transmission of price data from data collecting agencies to the user organisations both at Central and State levels.
  • Conclusions and Recommendations.
    • 11.6.3 The Commission, therefore, recommends that:
      • There is a need to unify the system of price data collection in such a way that the proposed mechanism should take into account the requirements of, at least, all central agencies compiling the price indices. The proposed system should be streamlined and strengthened in such a way that effective participation of both the Central and the State Agencies is ensured. The system would also facilitate the compilation of CPI for rural and urban areas with a substantial saving on the cost of price data collection. For speedier transmission of price data, appropriate tools of information technology should be deployed.
      • As there is no legislation of collection of price data at present, the feasibility of bringing it under the umbrella of Collection of Statistics Act, 1953 should be explored.
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