Dear Honourable Finance Minister,

This is with reference to Starred Question No. 403 of 22 April, 2008.

Rising inflation has been a clear and obvious cause for concern since 2007 on the back of high liquidity in the markets and constraints on the supply side.

In this context, sir, I would like to point out that the WPI figures that were the basis of the discussion are not an accurate representation of reality. In the popular understanding of the inflationary phenomenon, it is the CPI figures which are more comprehensive in terms of coverage of goods and services relevant to the given section of the community.

Given that there are issues about reconciling the proclaimed official reality of inflation and the real experience of the common man, it is necessary to have more broad-based and reliable price indices.

In this regard, several previous Economic Surveys published by the Government of India have mentioned the various initiatives and the reports of Expert Groups appointed by the Government for this purpose. The actual formulation and implementation of such initiatives, however, still remains to be seen.

Sir, I would urge you to construct and introduce a more credible and comprehensive consumer indice to better reflect the real costs to the common consumers, since they continue to be the worst hit from this rise in inflation.

Very truly yours,
Rajeev Chandrasekhar

Thiru. P Chidambaram
Minister of Finance
Government of India
New Delhi