Central Trade Unions have jointly demanded reworking de novo the computation exercise of changing base year by involving the trade unions as the trade unions represent the actually affected stakeholders in the project of computation of Consumers Price Index -IW along with the base year.
The CPI-IW (‘Consumer Price Index for industrial workers‘) series was first introduced with base 1960=100, on the results of Family Living Survey conducted in 1958-59 at 50 industrially important centres. The series was then, updated to base 1982=100 and the base year was further updated to 2001=100 . The current series of CPI-IW with base year 2001=100 covers 78 industrially important centers spread across the country.
Salaries of almost all the industrial workers, Government employees, Bank employees and employees of other institutions whose dearness allowance (DA) — a component of salary which undergoes revision to keep pace with the inflation rate in the economy — is linked to this index. Increase/decrease in Dearness relief (DR)of Pensioners throughout the country is also linked to this index. The series with base year 2001=100 is being used at present. The linking factors 4.63 is used to convert the base year 2001=100 to 1982 =100 and linking factor 4.93 is used to convert the base year to 1960.
Ten All india trade unions have in the joint letter pointed out several other inconsistencies and lacunas in the exercise already undertaken about the arbitrary shifting of base year to 2016 instead of earlier proposed 2014.
Why is 2016 being proposed instead, especially when the Labour Bureau itself had pointed out that the year 2016, because of Demonetisation in November, 2016, had affected the price levels of all items in the basket in the last quarter? (Minutes of the 64th meeting of TAC on SPCL, 22.10.2018) ,unions ask in their letter.
Unions further assert that any exercise based on prices collected from public distribution system is bound to lead to recurring loss to the workers. Therefore, prices in the open market need to be collected from all over the country.
Proposition of Linking Factor of 2.88 to convert numbers in 2016 series from 2001 (base year) series underlines intent of undervaluation /suppression of actual impact.
The period of 15 years gap between 2001 (existing base year) and 2016 (proposed base year) is a period of continuing economic slowdown, particularly from 2008 onward and has got certain specific trends of price movement in the economy.
Importantly, this period under consideration also reflects a trend of consistent decline of wage level of the workers on the average as per many authentic studies made by renowned institutions.
The components for minimum wages formulation as suggested by Supreme Court requires reworking of the commodities basket of CPI to include all those components in the basket with appropriate weightage assigned to them. This exercise is also important and crucial.
Unions have further requested for keeping the exercise for changing the Base year of CPI-IW in abeyance in the given extraordinary circumstances. The exercise, if at all required, may be restarted after normalcy is restored on an altogether new slate based on the suggestions/observations made by almost all the Central Trade Unions and involving the trade union representatives at every stage of such exercise, in the interests of transparency, accuracy, fairness and propriety.
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