Experts Want PDS Food Items Out Of The New Inflation Series

The Ministry of Statistics & Programme Implementation (MOSPI) has floated a discussion paper to seek views on the treatment of "free public distribution system (PDS) items in the Consumer Price Index (CPI) compilation", as it feels the current mechanism doesn't properly capture the impact of free food distribution on inflation.

- PRIYANSH VERMA

Most experts who FE spoke to, however, said there is no need to include freely distributed food items in the CPI series, as there is no money spent by households on these items. But some say, a new mechanism to capture the PDS items in a better way should be developed.

The paper comes in the backdrop of the CPI base revision exercise, which is being undertaken to overhaul the entire CPI basket, so that new consumption patterns of households may be captured and adequately reflected in the inflation numbers.

As per the paper, CPI base year will be changed from 2012 at present to 2024, and the index's weights and items will be derived from Household Consumption Expenditure Survey (HCES) 2022-23.