Informist, Tuesday, May 11, 2021

By Pragya Srivastava

--Govt source: NSO unlikely to change imputed CPI for Apr, May 2020

--NSO likely to discuss imputed CPI numbers again today

NEW DELHI – The National Statistical Office is holding last-minute meetings on the Consumer Price Index for April and May 2020 to address concerns raised by the Reserve Bank of India's Monetary Policy Committee. However, indications are that any changes to last year's numbers are unlikely, according to an official aware of the developments.

"Meetings were held with senior NSO officials on Monday, including the secretary, and most them were of the opinion that imputed CPI should not be changed as they were officially released after detailed consultations with the finance ministry, the RBI, and the International Monetary Fund," the official told Informist on the condition of anonymity.

"The NSO officially released these (imputed) figures, and they are owning these figures. There is little question of taking it back," the official said.

A final decision on the matter is yet to be taken, as more meetings are likely today ahead of the release of CPI data for April on Wednesday.

According to a poll by Informist, CPI inflation is seen falling to a three-month low of 4.1% in April, thanks to the statistical effect of a high base.

The national lockdown last year had made it difficult for the NSO to collect price data as there were very few transactions in the market for non-essential items on account of the restrictions on movement and activity. Consequently, the NSO was forced to impute the missing data for April and May 2020.

However, the Monetary Policy Committee felt the imputed data, which showed CPI inflation was 7.22% in April and 6.27% in May, should be regarded as a "break" in the CPI series for the purpose of monetary policy formulation and conduct, as they had been produced for the purpose of business continuity.

Those same imputed numbers will now form the base to compute the inflation prints for April and May this year.

If the NSO finally decides to keep the imputed index numbers for April and May 2020 unchanged, it may put the Monetary Policy Committee in a spot. Since the committee did not accept the inflation numbers arrived at using imputed data, it might have to do the same for CPI inflation for April and May this year.  End

Edited by Avishek Dutta

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