Inflation for industrial workers (CPI-IW)

Why it matters

For millions of workers, the Consumer Price Index for Industrial Workers (CPI-IW) turns price rises into pay rises. Their dearness allowance and many minimum wages are revised with it, so that their pay keeps its buying power when prices rise. The same revisions raise the wage bill of the central and State governments and of employers.

It also shows how fast living costs rise for working-class families in industrial towns, whose budgets give more weight to food than the average urban household's.

What it is

The Consumer Price Index for Industrial Workers (CPI-IW) follows the retail prices paid by working-class families in 88 industrial centres. A working-class family has at least one member doing manual work in one of seven sectors: factories, mines, plantations, railways, public motor transport, electricity generation and distribution, and ports and docks. The family also earns half or more of its income from manual work.

The Labour Bureau compiles the index every month, on base 2016. Its weights come from the Working Class Family Income and Expenditure Survey, carried out in the 88 centres from January to December 2016. Food and beverages carry 39.20% of the weight and housing 17.75%. Price collectors from State statistics and labour offices record prices in 317 markets.

CPI-IW is built for wage indexation. Dearness allowance for central and State government employees and for industrial workers in the organised sector is revised with it, and so are minimum wages. A rise in the index therefore flows into the pay of millions of workers.

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