New Delhi: Government on Tuesday overhauled the method of calculating inflation index in the country in order to make the figures reflect everyday prices.
This overhaul includes addition of 200 items including DVDs, pen-drives, computers and microwave ovens. Those items which were taken out of the list include black-and-white television sets and audio cassettes.
Speaking on the development, Commerce Minister Anand Sharma said that inflation index based on new list will be more informative and help monitor inflation better.
"It will help in informing both the government and the people as to how the prices are moving; better monitoring, better responses in intervention as and when required," Sharma said.
Commonly consumed products like ice-cream and mineral water have also been included. Even flowers, washing- machine, gold and silver will be counted now.
The old system was based on two-decade-old index. The overhauled system will be based on 2004-2005 as the base year.
"We need to update the system and the new system will reflect this," Deputy Chairman of Planning Commission Montek Singh Ahluwalia said.
However, as far as providing respite from the soaring prices is concerned, the new method may not be able to do much.
The new index better reflects price and everyday cost of living. But with inflation at double digits for months, inflation, whether old or new, will continue to eat away common man's budget.
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