The survey said that the weightage of food products should be revised to show the true picture of inflation in the country.
Economic Survey 2020-21 Inflation: Chief Economic Advisor (CEA) KV Subramanian on Friday launched the Economic Survey 2020-21, presented by Finance Minister Nirmala Sitharaman in the morning. CEA also launched the Economic Survey mobile app. The Economic Survey states that the weight of food products should be revised to show the true picture of inflation in the country.
New sources of data should be included
It has been suggested in the Economic Review 2020-21 presented in Parliament on Friday. Along with this, it has been said in the review that as inflation of retail e-commerce transactions increases, new sources of price data should be included in inflation. The survey said that the recent increase in retail inflation based on the consumer price index is related to supply problems.
The survey states that the weight of all items in retail inflation is based on the National Consumer Statistics Office (NSO) 2011-12 consumption survey of households. According to the survey, the weight of food items in this index has decreased during the last decade. It has suggested that revised weightage of food products should be included in the index to show the correct picture of inflation. Apart from this, due to increasing retail e-commerce transactions, new sources of price data should also be included in it.
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The survey said that during the financial year 2020-21, retail and wholesale inflation has gone in the opposite direction from each other. While the main retail inflation has increased compared to last year, inflation based on the wholesale price index has come down. According to the survey, retail inflation has been affected by supply-side problems caused by the Kovid-19 epidemic. Food items contributed to the increase in total inflation.
