Labour and Employment Minister Santosh Kumar Gangwar launched the new series of consumer price index for industrial workers (CPI-IW) on Thursday, which is used by policymakers and for fixing dearness allowance of employees.
The CPI-IW for September, 2020, under the new series, stood at 118. Labour Bureau director general D P S Negi said that the linking factor for the conversion of new series to the old one is 2.88.
The CPI base year is being revised from 2001. Ubder the previous base, the CPI-IW for August, 2020 stood at 338. Accounting for a linking factor, the CPI-IW for August would be 117.4.
“This means that as of date, the index will have no impact on dearness allowance. It will remain as it is,” Negi said.
The CPI-IW is used to compute dearness allowance of government employees and workers in the industrial sectors. The D.A. gets revised twice a year and is meant to adjust wage to the impact of inflation.
The CPI-IW is also ysed to fix and revise minimum wages, besides measuring the inflation in retail prices, Gangwar said.
The labour minister urged the Labour Bureau to revise the base year of CPI for agricultural and rural labour by August, 2021. The base year for the index, used to compute wages for agricultural and Mahatma Gandhi National Rural Employment Guarantee scheme workers, is 1986-87 at present.
“The Bureau has to soon prepare itself to collect database under all the four labour codes,” Gangwar said.
The CPI-IW, with the base year 2016, will give more weight to non-food items than the food ones compared to the 2001 index. The weight for food and beverages components is set to decline from 46 per cent to 39 per cent in the new series.
On the other hand, the weight for non-food items such as education, health, entertainment and recreation, household goods, and services, transport and communication is slated to jump from 23 per cent in 2001 to 30 per cent in 2016.
