Confederation issues statement against the new CPI-IW series with 3016 base

The Confederation of Central Government Employees and Workers has issued a press statement highlighting the drawbacks of the new series of CPI issued by the Ministry of Labour. It says that the move in making 2016 as the base year is totally illogical as it was an extraordinary year when the economic activities almost came to a grinding halt over the grand declaration of demonetisation. It says that the base year selected must be a normal year, sans political, social and economic upheaval.

The statement also raises apprehensions on the components of the basket. It says that by the reduction in weightage to the food content, the lower rung in the working class, whose proportional expenditure will be more on food items, is set to lose.

The dearness compensation (DA) to the workers is that the Government has chosen the PDS prices of the commodities for computation.  The present truncated PDS targets only a segment of the population and most of the Central Government employees are excluded from the PDS in almost all States in the country. Hence the prices which are subsidised, considered for the index will not match the actuals. 

The statement terms the change as a move by the ruling class to make the corporates happy.  

The excerpts from the statement are given below.

Confederation of Central Government Employees and workers notes with distress that the Government has made yet another attempt to depress the wages of the workers this time in the organised sector.  The indexation of wages and the consequent grant of compensatory allowance had been the product of bitter and prolonged struggles of the workers. The present system of computing the dearness compensation though varies from sector to sector, is based on the consumer price index brought out in stipulated periodicity by the Ministry of Labour.  There had been varied and wide-ranging criticism over the manner and methodology adopted in the computation of the index figures.  Instead of addressing those genuine and legitimate deficiencies, the  Government has gone now to create a new series which would further accentuate those very defects to the utter disadvantage of the workers. It is all the more deplorable as the Government has chosen the pandemic days to usher in the new series of CPI.

The Government will bring out the new series with 2016 as the base year.  2016, in so far as the Indian economy is concerned, is an extremely extraordinary year when the economic activities almost came to a grinding halt over the grand declaration of demonetisation.  It is an established dictum that base year selected must be a normal year, sans political, social and economic upheaval.  Why then 2016, has no logical explanation. 

The Government has also decided to change the components of the basket.  Post justification had been an afterthought, conceived to cover up.  Had there been a consultation with the stakeholders, many of the controversies that have arisen could have been avoided.  By depressing the food content in the basket, the lower rung in the working class will lose out more.  In the past, the base year change used to be effected once after two decades.  Why then the periodicity was reduced and bring out a new series now begs reasoned explanation.

Read the full article at http://confederationhq.blogspot.com/2020/10/