Labour Ministry releases new inflation index for working-class; no impact on DA

The Union Labour Ministry on Thursday released the new series of CPI-IW (consumer price index for industrial workers) with 2016 as the base year. Based on this index, the policymakers decide on dearness allowance to the government employees, pensioners' dearness relief (DR) and industrial workers' salaries. The CPI-IW index hasn't been revised since 2001, which ideally should be revised every five years.

The base year is being revised from 2001 to 2016, under which the CPI-IW for August stood at 338.  The linking for the conversion of the new series to the old one is 2.88. Considering this, the CPI-IW for August stands at 117.4, while for September, it has been recorded at 118.

The new CPI-IW index will not have impact on dearness allowance of the government employees and industrial workers, Labour Bureau director-general DPS Negi said, while clearing the air around speculations that the new index will lead to salary hike for government employees and industrial workers.

During the release of the new CPI-IW index, Union Labour and Employment Minister Santosh Kumar Gangwar said the new index is yet to revise minimum wages and inflation in retail prices. He also urged the labour bureau to revise the base year for agriculture and rural labour by August next year. Notably, the base year for agriculture and rural labour workers is still 1986-87.

The Union Ministry of Labour & Employment had also earlier denied reports that it'll lead to hike in DA and thus salaries. The ministry said it has never said the new index would lead to a hike in salaries of industrial workers and government employees. "It will depend on the behaviour of new series which is too early to predict at this stage," the ministry had clarified.

The new CPI-IW will focus more on increasing spending on healthcare, education, transport, urban housing, and mobile phone expenses, etc. The revised index will take into consideration data from a broad array of industrial centres to capture the ground realities more precisely.

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