The provisional inflation based on wholesale price index (WPI) hasn’t crossed 8% yet, but the revision of a whopping 1.9% points in annual rate of inflation for the week ended March 8 has led experts to believe inflation is now well above that mark.
The revised rate of inflation for the week ended March 8 stood at 7.78% as compared to 5.92%. Provisional WPI estimates are revised two weeks later and final figures come after eight weeks.
In just two months, the inflation rate rose two percentage points from 5.66% for the week ended February 16 to an uncomfortably high level of 7.83% for the week ended May 3. Delayed data about the revisions in metals prices among other items were blamed for the spike.
The recent scale of the revisions suggests the inflation rate seen this March onwards (the index rose 3.6% points during March-April) would perhaps be even higher when the final estimates for the month are announced after eight weeks. The problem is that the data are often inadequate and delayed. The government cannot take any action against those defaulting on furnishing of data as a legislation that would empower it to take them to court is pending for over an year.
Serious questions have arisen about the veracity and accuracy of the country’s headline inflation data, that forms the basis of many major national policy decisions.
“The delays are on account of units (producers or traders) that have been shortlisted to provide the data, are not doing so on a regular basis. The data is submitted on a voluntary basis. If someone does not send it, at best we can send the unit a reminder,” an official in ministry of statistics and programme implementation said.
”The Collection of Statistics Act, 1953 does not give enough powers to the statistics wing to penalise a company for not providing data in time. However, the Union Cabinet has approved Collection of Statistics Bill, 2007 which empowers the statistics department to take defaulting companies to court.
Pronab Sen, India’s chief statistician, said the sample used in the index cannot include the entire data. “Any index is based on samples. No index can have a 100% sample size. It is possible that the samples included in the survey have not increased their prices. There is always a problem with the response we receive,” he said.
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