These items are based on the household consumer expenditure survey conducted over a decade ago in 2011.
In the January-May period, prices of radios, tape recorders and 2-in-1s were up 9.4% from the year earlier. In the case of VCR, VCD and DVD players, inflation was 12.6% in the first five months of the year.
Mind you, horse cart fares have fallen 6.3% in 2023. They rose 1.6% during the pandemic year of 2020.
According to experts, if some items are not available, their values are deduced. “If there are any of them around, values can be calculated; if not, it is extrapolation,” said a person aware of the computation process.
Still, the combined weightage of these items is around 3% of the entire index – not enough to impact retail inflation calculations significantly, experts said. To be sure, more categories could get added over time as consumption patterns change, which may affect the calculation of CPI.The Reserve Bank of India (RBI) is mandated to keep retail inflation based on the CPI at 4%, with a tolerance band of 2 percentage points on either side of that. With inflation reined in, the RBI has kept the policy rate unchanged at 6.5% for the second meeting in a row. IDFC First Bank India economist Gaura Sengupta highlighted the example of fuel and light.
“A small but persistent divergence is seen, likely caused by non-availability of price quotes of traditional fuels,” she said.
For example, the CPI also tracks the prices of dung cakes, firewood and chips. “For now, the divergence between the published miscellaneous index and the one derived from the weighted sum of the constituents is very minor but it could rise as more items go out of use,” Sengupta noted.
Landlines are becoming a thing of the past, and so are torches and sewing machines, with limited consumption across households, experts pointed out. All these are tracked.
“The CPI base year is more than 10 years old, and there have been consumption pattern changes over that period,” Sengupta said. “As a result, certain items are no longer in use, and their weights are redistributed among other items for which price quotes are available.”
Experts say updated surveys will capture trends better. The government is in the process of concluding the first consumer expenditure survey in June. That will be used to update the basket of products tracked for retail inflation. But the results of the survey will take another year to be announced.