Inflation: the real picture now

By Alok Mukherjee

NEW DELHI, APRIL. 14. With the Central Government switching to 1993-94 as the base year for the Wholesale Price Index (WPI) from the earlier base of 1980-81 prices, the annual rate of inflation on a point-to-point basis has jumped to over four per cent.

As per the new series, the inflation rate for the week ended April 1, 2000 was placed at 4.22 per cent, up from 4.16 per cent for the week-ended March 25, 2000. However, the rate of inflation on March 25 was recorded at 3.74 per cent, based on the earlier series.

The new index for the WPI had been ready some time ago and the switch was scheduled for the new financial year. Earlier, the Central Statistical Organisation (CSO), which collates macro- economic data for the economy, had switched to 1993-94 as the base year for most national accounts statistics. The year 1993-94 was selected because it was a ``normal year'' since the beginning of the Nineties decade, the years 1991 and 1992 suffered from the lag effects of a sharp deterioration in external balances as well as other economic parameters like industrial production and inflation.

Sources in the Finance Ministry indicated that though the new series was reflecting a higher inflation rate, it was a more realistic presentation of the actual situation prevailing on the ground.

Send this article to Friends by E-Mail

Section  : Front Page
Previous : Problems will be solved, PM assures PSU employees
Next     : CMs meet to discuss fiscal scenario likely