Revamping CPI Methodology for Free Food Distribution: MoSPI's Innovative Approach

The Ministry of Statistics and Programme Implementation (MoSPI) has put forth a methodology that accurately incorporates the distribution of free food grains through the PDS in the Consumer Price Index (CPI). This CPI revision is vital for monetary policy, cost of living adjustments, and social welfare schemes, in light of the recent free distribution initiatives.

The Ministry of Statistics and Programme Implementation (MoSPI) has unveiled a new methodology aimed at accurately representing free food distribution through the Public Distribution System (PDS) in the Consumer Price Index (CPI). This revision is crucial, given its dual role in shaping monetary policy and as a measure for social welfare schemes.

With CPI serving as a key barometer for changes in the cost of living, MoSPI's latest proposal enhances coverage by incorporating modern technology and refined approaches to price collection. Experts from national and international bodies, including the Reserve Bank of India and International Monetary Fund, contributed to the development of this approach.

Amid India's significant free food distribution program, which impacts 75% of the rural population and 50% of the urban populace, the new methodology seeks to provide a realistic reflection of these benefits in inflation measurements. MoSPI invites stakeholder comments by October 22, ensuring the methodology accurately represents price changes without distortion.

(With inputs from agencies.)