There may soon be a major change in the formula for calculating inflation in India. This is indicated by the recent Household Consumption Expenditure Survey (HCES). Under the change, many such products can be taken out of the inflation basket, which are no longer relevant. At the same time, many such products can be included in the basket, on which people are now spending a good amount.
How is inflation calculated?
Inflation is calculated in a comparative way. It happens. For this, a basket of products and services is made. In this inflation basket, those products and services are kept which form the most important part in the expenditure of the families, i.e. the things on which people spend the most. For this reason, everything from vegetables to mobile tariffs are included in the basket. Inflation fluctuates due to the rise and fall in their prices.
This is why there is change in the basket
It is necessary to change the inflation basket from time to time. This is because many products and services go out of use among the common people with time and new things emerge in their place. For example, when mobile use became widespread, mobile tariffs were included in the basket. Currently, the inflation basket includes many products like VCR, VCD, DVD players, which are used to a negligible extent. At the same time, people are now spending a large part of their income on many new products like Airpods to Play Station.
An eye on the cost of repair and maintenance
In the Household Consumption Expenditure Survey, many New products were given space. The survey focused on what things Indians purchased during the financial year 2022-23. Along with this, efforts were also made to find out what was the quantity and value of the items purchased. The survey also included the cost of first hand or second hand purchases and repair and maintenance of various items.
Products included in the basket
Play in the survey of household expenses. Stations, home theater systems, radios etc. were kept in the category of recreational appliances. The category already includes products like VCR, VCD and DVD players. Similarly, Air Pod was placed in the category of personal use items along with headphones, earphones, ear pods, Bluetooth devices, speakers etc. Products like power bank, hair dryer, hair straightener, hair curler, hair trimmer, groomer, epilator were kept in the category of other personal goods.
Included from OTT to online courses
Spending on other streaming services including Netflix, Amazon Prime was also included in the consumption survey. An attempt was also made to track the expenditure on e-books, audio books, online learning courses etc. in the survey. Sanitizers, which became common after Covid, were kept in the category of monthly expenditure.
Also read: Government will provide universal insurance to every citizen, started in this state
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