IEP Project Report

8/19/2019 IEP Project Report

1/10


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Price Index. Till =anuary #$(#, in India there were only following four !PIs compiled and

released on national level.

(9 Industrial Workers 6IW9 6base #$$(9

#9 Agricultural abourer 6A9 6base (40&0/9

>9


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Producer Price Index (PPI):

These are indices that measure the average change over time in selling prices by producers of

goods and services. They measure price change from the point of view of the seller. It covers both goods and services while WPI covers only goods. PPI is better than !PI because there is

difference in sellerEs and purchaserEs price due to government subsidies, taxes, and distribution

costs. "a+ority of the ?!8 countries measure inflation based on Producer Price Index 6PPI9. In

most of the countries, WPI has been replaced by PPI due to the broader coverage provided by thePPI in terms of products and industries and the conceptual concordance between PPI and system

the national account. PPI is considered to be more relevant and technically superior compared to

one at wholesale level. -ew examples of countries using PPI are !anada, :)A, Aussies, ).;orea,

:;, )pain, and Italy. ffice of the ?conomic Adviser 6?A9 has taken up the initiative for constructing a Producer Price Index 6PPI9 for India.

Service Price Index (SPI):

The ffice of ?conomic Advisor has started )ervices Price Indices 6)PI9 on experimental basis

to capture inflation in following service sectors2


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Telecom )PIs nly for cellular services on the basis of T


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'$ isher Index:

The -isher index is calculated by taking the geometric mean of the aspeyres and Paascheindices2

The -isher index helps overcome the problem of item substitution bias.

Inflation Calculation xample

Consumer ood Price Inflation (CPI):

Step #: ettin" xpenditure !ata$

We use !onsumer ?xpenditure )urvey 6#$((&(#9 to get value 6in ./' /$*/-

Onion (/.$ '$0'- (.(/ &$1,-

(otato 4.4 &$&'- #$.4/ '$'1-


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Tomato (.# '$.'- (./4 &$*,-

%>%.'( #.'

Step ': et consumer price data$ (We too2 median price for the month of ebruary)

Price !ata or Chennai

Commodity )e'*+, )e'*+- )e'*+. )e'*+

Milk '. &0 &. &.

Rice '& '& '+ &&

Sun flower Oil ,. 0+ 0. ,*

Tea &&/ &&/ &*/ &*/

Tur Dal 0/ .+ .& *1

Onion && #+ &' ,

Urad Dal 0/ .. *' *1

Tomato #& 0 #/ #,

Potato #0 #1 #, #&

Wheat/Atta '+ '& &* &&

Sugar '' '& '1 '/

Gram Dal 1/ 1# *+ 1&

Brinal #+ ## #1 #0

Moong Dal ### 0* ., *,

!a""age #& ## #1 #'

Ground #utOil

#/0 #/+ #+. #&'

Gur $%agger&' 1# 1# '0 ',

Ma(oor Dal ,* 1# 1& ++

Price !ata or !elhi

Commodity )e'*+, )e'*+- )e'*+. )e'*+

Milk ', '* '/ &0

Wheat/Atta && &/ #.

Rice '/ &0 &* &+

Sugar '+ '* ', '+

Sun lo!erOil

00 #/* #/* ##/

Tea #01 # &/+ #*+

Potato #+ #. #& 0

Tomato '. #1 #*

Onion '' && &, #'


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Tur Dal ,1 .1 ., *,

Moong Dal #/& ,/ ,# *0

Gram Dal 1* 1/ *. 1/

Ma(oor Dal ,' *+ */ 1'

Brinal '/ &, '/ '*

Urad Dal ,+ *1 *, .#

!a""age #1 #+ #+ #1

Gur $%agger&' +& '* ', '+

Ground #utOil

#+' #*, #11 #+&

Step +: ix a base year (&/#&)$ Calculate Price 3elative 4ith respect to base yr$

Step 1: Ta2e Sum5Product of the Price ratios and Wei"hts$

Step *: Calculate 6o6 chan"e in CPI to calculate Inflation rate$

Chennai(&/#&5&/#1)

Commodity Ratios(2012 = 100)

Milk 1.37 1.07 1.00 1.00

Rice 1.45 1.45 1.55 1.00

Sun flower Oil 1.01 1.09 1.13 1.00

Tea 0.85 0.85 1.00 1.00

Tur Dal 1.38 1.14 1.11 1.00

Onion 2.75 1.75 2.88 1.00Urad Dal 1.38 1.18 0.97 1.00

Tomato 0.67 0.50 0.56 1.00

Potato 1.58 1.25 1.50 1.00

Wheat/Atta 1.55 1.45 1.18 1.00

Sugar 1.10 1.07 1.17 1.00

Gram Dal 0.96 0.98 1.23 1.00

Brinal 0.74 0.58 0.79 1.00

Moong Dal 1.63 1.41 1.15 1.00

!a""age 0.92 0.85 1.15 1.00

Ground #utOil 0.89 0.85 1.20 1.00

Gur $%agger&' 1.34 1.34 1.03 1.00

Ma(oor Dal 1.95 1.16 1.18 1.00

CPI135 118 124 100

Infation(%) 14.18 - 23.91 -


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% 4.85

% %

!elhi(&/#&5&/#1)

Commodity Ratios (2012 = 100)

Milk 1.31 1.24 1.03 1.00

Wheat/Atta 1.29 1.24 1.18 1.00

Rice 1.25 1.21 1.08 1.00

Sugar 1.00 1.06 1.12 1.00

Sun lo!erOil 0.90 0.96 0.96 1.00

Tea 1.19 1.29 1.24 1.00

Potato 1.56 1.89 1.33 1.00

Tomato 2.31 1.31 0.94 1.00

Onion 2.54 1.69 2.15 1.00

Tur Dal 1.25 1.10 1.15 1.00

Moong Dal 1.48 1.16 1.17 1.00

Gram Dal 1.12 1.00 1.34 1.00

Ma(oor Dal 1.57 1.21 1.13 1.00

Brinal 0.83 0.78 0.83 1.00

Urad Dal 1.18 0.92 0.96 1.00

!a""age 1.00 0.93 0.93 1.00

Gur $%agger&' 1.24 1.06 1.12 1.00

Ground #utOil 1.01 1.18 1.09 1.00

CPI132 123 111 100

Infation(%)

7.13

%

10.76

%

11.44

% -

CPI and Inflation Trends for 7oth Cities:


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1 2 3 409400

20

40

60

80

100

120

140

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%132123

111

100

7.13%

10.76%

11.44%

CPI and Food Infation T!nds in "!#$i (2012-2015)

CPI

Infation(%)

1 2 3 40

20

40

60

80

100

120

140

160

-10.00%

-5.00%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

135

118124

10014.18%

-4.85%

23.91%

0.00%

CPI and Food Infation T!nds in C$!nnai (2012-2015)

CPI

Infation(%)


10/10

https2CCkbsonigara.wordpress.comCtagCwpi&compositionC

https2CCen.wikipedia.orgCwikiC*8PLdeflator

http2CCdata.gov.in

http2CCmospi.nic.inC"ospiL5ewCuploadC$+une(%.pdf
https://kbsonigara.wordpress.com/tag/wpi-composition/https://en.wikipedia.org/wiki/GDP_deflatorhttp://data.gov.in/http://mospi.nic.in/Mospi_New/upload/Report_no558_rou68_30june14.pdfhttps://kbsonigara.wordpress.com/tag/wpi-composition/https://en.wikipedia.org/wiki/GDP_deflatorhttp://data.gov.in/http://mospi.nic.in/Mospi_New/upload/Report_no558_rou68_30june14.pdf

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