What is meant by consumer price index and how cpi to be arrived??
From India, Coimbatore
Acknowledge(0)
Amend(0)
From India, Coimbatore
Acknowledge(0)Amend(0)
A measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care. The CPI is calculated by taking price changes for each item in the predetermined basket of goods and averaging them; the goods are weighted according to their importance. Changes in CPI are used to assess price changes associated with the cost of living.
RBI releases the CPI index every month. Visit the RBI site for details.
From India, Lucknow
Acknowledge(0)Amend(0)
616RBI releases the CPI index every month. Visit the RBI site for details.
From India, Lucknow
Acknowledge(0)Amend(0)
Dear keerthikeyanm,
I shall make a brief on Consumer Price Index, its compilation, its necessity, or how it is related to DA, etc. Hence I start with DA.
Considering the living cost and all, Wage Revision is being done once in five years or ten years. But inflation will go up day by day, and subsequently, the money value will come down. To compensate for this, we have to wait until the next Wage Revision, which is not practical. That is why the DA is introduced.
The devaluation of money can be assessed through the Wholesale Price Index, All India Consumer Price Index, etc. The difference between these two is that the price variation of all commodities is taken into account for the Wholesale Price Index.
But for AICPI, there are some differences/limitations:
1. There is a particular Consumer, viz. Industrial Worker.
2. Some specified goods & services are defined, called a "basket of goods."
3. Along with the price variation of commodities, its consumable quantity will also be considered.
4. All over India, 78 Centers are selected to take the average.
In India, the All India Consumer Price Index was first taken in the year 1960. The percentage of the average price is taken as the Consumer Price Index. As 1960 is the base year, CPI will be 100 in that year. To calculate the variations thereafter, I shall quote one example.
A family needs 20 kgs of rice, 5 kgs of sugar, and 30 liters of milk in a month. In a particular interval, the price hiked from Rs. 20 to Rs. 25 per kg for rice, Rs. 20 to Rs. 30 per kg for sugar, and Rs. 10 to Rs. 13 per liter for milk. Then the price at the base stage is 20x20 + 5x20 + 30x10 = 800 (Base points 100). After the price hike, it will be 20x25 + 5x30 + 30x13 = 1040. The revised point is 1040 / 800 x 100 = 130. Here the new consumer price index is 130, and the variation in points is 30.
In October 1982, the AICPI is 493, meaning average prices increased by 4.93 times compared to that of 1960.
Based on the All India Consumer Price, Industrial DA is being paid; variable in quarters commencing from January, April, July, & October. For January, the AICPI will be the average of the previous September, October, & November. Similarly, for April, it will be December, January, & February; for July, it will be March, April, & May; and for October, it will be June, July, & August, respectively.
When the money devaluation is fully compensated, it is called full DA neutralization. The formula for full DA neutralization = (Total points - Base points) / Base points (in percentage). The AICPI was introduced in India in 1960 and revised in 1982 & 2001. The AICPI of 2001 x 4.63 gives the AICPI of 1982, and the AICPI of 1982 x 4.93 gives the AICPI of 1960. For DA calculation, the AICPI of 1960 is accepted as the base.
Now in India, mainly two terms' wage settlements are in existence; Wage Settlements of 1.1.1997 & 1.1.2007. The base point on 1.1.1997 is 1708, and on 1.1.2007 is 2884.
I shall quote one example, i.e., the calculation of AICPI for July '10. This is equivalent to the average of the previous March, April, & May; which is recorded as 170, 170, & 172 (Base year 2001). Multiply by 4.63 and round, we get 787, 787, & 796 (Base year 1982). Multiply by 4.93 and round, we get 3880, 3880, & 3924 (Base year 1960). Find the average of these 3 and round, we get 3895.
DA for 1.1.97 scale. Total points - 3895, Base points - 1708, Total - Base = 2187. % is 2187 / 1708 x 100 = 128.0 (Correct to one decimal).
DA for 1.1.2007 scale. Total points - 3895, Base points - 2884, Total - Base = 1011. % is 1011 / 2884 x 100 = 35.1 (Correct to one decimal).
I shall insert an Excel sheet for IDA calculation w.e.f 1.10.2008. You may extend the rows further (as necessary) and just enter the 3 indexes towards the year 2001 in green-colored columns. The results will appear in yellow, and red is used for static information.
With regards,
ABBAS.P.S,
Secretary,
ITI Employees' Association,
ITI Limited, PALAKKAD - 678 623,
KERALA, INDIA.
+91 9447 467 667
AICPI (base 2001) can be found on the following site: [Labour Bureau Main Page](http://labourbureau.nic.in)
From India, Bangalore
Acknowledge(0)Amend(0)
I shall make a brief on Consumer Price Index, its compilation, its necessity, or how it is related to DA, etc. Hence I start with DA.
Considering the living cost and all, Wage Revision is being done once in five years or ten years. But inflation will go up day by day, and subsequently, the money value will come down. To compensate for this, we have to wait until the next Wage Revision, which is not practical. That is why the DA is introduced.
The devaluation of money can be assessed through the Wholesale Price Index, All India Consumer Price Index, etc. The difference between these two is that the price variation of all commodities is taken into account for the Wholesale Price Index.
But for AICPI, there are some differences/limitations:
1. There is a particular Consumer, viz. Industrial Worker.
2. Some specified goods & services are defined, called a "basket of goods."
3. Along with the price variation of commodities, its consumable quantity will also be considered.
4. All over India, 78 Centers are selected to take the average.
In India, the All India Consumer Price Index was first taken in the year 1960. The percentage of the average price is taken as the Consumer Price Index. As 1960 is the base year, CPI will be 100 in that year. To calculate the variations thereafter, I shall quote one example.
A family needs 20 kgs of rice, 5 kgs of sugar, and 30 liters of milk in a month. In a particular interval, the price hiked from Rs. 20 to Rs. 25 per kg for rice, Rs. 20 to Rs. 30 per kg for sugar, and Rs. 10 to Rs. 13 per liter for milk. Then the price at the base stage is 20x20 + 5x20 + 30x10 = 800 (Base points 100). After the price hike, it will be 20x25 + 5x30 + 30x13 = 1040. The revised point is 1040 / 800 x 100 = 130. Here the new consumer price index is 130, and the variation in points is 30.
In October 1982, the AICPI is 493, meaning average prices increased by 4.93 times compared to that of 1960.
Based on the All India Consumer Price, Industrial DA is being paid; variable in quarters commencing from January, April, July, & October. For January, the AICPI will be the average of the previous September, October, & November. Similarly, for April, it will be December, January, & February; for July, it will be March, April, & May; and for October, it will be June, July, & August, respectively.
When the money devaluation is fully compensated, it is called full DA neutralization. The formula for full DA neutralization = (Total points - Base points) / Base points (in percentage). The AICPI was introduced in India in 1960 and revised in 1982 & 2001. The AICPI of 2001 x 4.63 gives the AICPI of 1982, and the AICPI of 1982 x 4.93 gives the AICPI of 1960. For DA calculation, the AICPI of 1960 is accepted as the base.
Now in India, mainly two terms' wage settlements are in existence; Wage Settlements of 1.1.1997 & 1.1.2007. The base point on 1.1.1997 is 1708, and on 1.1.2007 is 2884.
I shall quote one example, i.e., the calculation of AICPI for July '10. This is equivalent to the average of the previous March, April, & May; which is recorded as 170, 170, & 172 (Base year 2001). Multiply by 4.63 and round, we get 787, 787, & 796 (Base year 1982). Multiply by 4.93 and round, we get 3880, 3880, & 3924 (Base year 1960). Find the average of these 3 and round, we get 3895.
DA for 1.1.97 scale. Total points - 3895, Base points - 1708, Total - Base = 2187. % is 2187 / 1708 x 100 = 128.0 (Correct to one decimal).
DA for 1.1.2007 scale. Total points - 3895, Base points - 2884, Total - Base = 1011. % is 1011 / 2884 x 100 = 35.1 (Correct to one decimal).
I shall insert an Excel sheet for IDA calculation w.e.f 1.10.2008. You may extend the rows further (as necessary) and just enter the 3 indexes towards the year 2001 in green-colored columns. The results will appear in yellow, and red is used for static information.
With regards,
ABBAS.P.S,
Secretary,
ITI Employees' Association,
ITI Limited, PALAKKAD - 678 623,
KERALA, INDIA.
+91 9447 467 667
AICPI (base 2001) can be found on the following site: [Labour Bureau Main Page](http://labourbureau.nic.in)
From India, Bangalore
Acknowledge(0)Amend(0)Join Our Community and get connected with the right people who can help. Our AI-powered platform provides real-time fact-checking, peer-reviewed insights, and a vast historical knowledge base to support your search.
Safety Index calculation work sheet.pdf
SALARY SHEET CALCULATION.xls