This refers to the report “RBI wants a producer price index for inflation” (July 18). Earlier, too, the RBI governor had expressed concern over multiple tools being used by the government and various agencies to gauge price rise, with specific reference to the incoherence in the movement of wholesale price index (WPI) and consumer price index (CPI). Now RBI Governor D Subbarao has proposed a producer price index (PPI). The government and the authorities concerned should take this forward to enhance credibility and transparency in statistical tools. These statistical tools affect the common man’s daily life since they play an integral role in defining the cash flow of the poorest man’s household budget to the country’s current account deficit.
Efforts should be made to use indices for understanding the movement of costs, prices and margins, industry- and sector-wise, and even in the country’s different geographical areas. This could be made possible by evolving PPI, CPI and margin index (tracking margins available at various levels in financial products, pharmaceuticals, real estate, services and so on) with dedicated purposes.
Like the Tata Nano brought about some change in the automobile manufacturers’ mindset, the various indices, if scientifically evolved with transparency and speed, may bring about a change in our approach to rent, costs, profits and margins.
M G Warrier Mumbai
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