Tape recorders, radios, and VCD/DVD players are stil a part of the Consumer Price Index (CPI) list of the 300 items that are tracked for changes in price despite these items having long gone off buyers' shopping lists, according to a report published by the Economic Times.
The publication reveals that these items are still in the list since the consumer expenditure survey was last done in 2011.
Data has revealed that prices of tape recorders, radios, and 2-in-1s increased 9.4 per cent year over year in January-May. VCRs, DVD, and VCD players saw inflation of 12.6 per cent in the same time period.
The list also includes horse cart fares, that have decreased by 6.3 per cent in 2023.
Experts have revealed that values of those items unavailable in markets are deducted. The publication spoke to someone aware of the process of computation who has revealed, "If there are any of them around, values can be calculated; if not, it is extrapolation."
When combined, these not-in-use items, in total, make up about 3 per cent of the index. Experts have revealed that this share is not enough to significantly calculate retail inflation. Over time, as patterns of consumption shift, more categories will be added to the list, thus impacting the calculation of CPI.
Based on the CPI, the RBI has to keep retail inflation at 4 per cent, which further has a bench of tolerance of two percentage points on both sides. The central bank has been able to keep these rate unchanged at 6.5 per cent for two consecutive meetings.
The publication spoke to IDFC First Bank's India economist, Gaura Sengupta, who said, "A small but persistent divergence is seen, likely caused by non-availability of price quotes of traditional fuels."
Among traditional fuels metioned above, the CPI also keeps track of firewood, dung cakes, and chips.
Sengupta also added, "For now, the divergence between the published miscellaneous index and the one derived from the weighted sum of the constituents is very minor but it could rise as more items go out of use."
Sewing machines, torches, and landlines — things that are not used commonly now, are still on the CPI list, experts have pointed out.
Sengupta further noted, "The CPI base year is more than 10 years old, and there have been consumption pattern changes over that period," further adding, "As a result, certain items are no longer in use, and their weights are redistributed among other items for which price quotes are available."
Experts are of the opinion that once the surveys are updated, they will be able to better capture pricing trends across the country. The Centre is reportedly planning to conduct a consumer expenditure survey this month, which can be used to reassess the list of products on the CPI list. However, the results of said survey will only be announced next year.