Change in the time of release of inflation data

 Reference:

The Ministry of Statistics and Programme Implementation (MoSPI) has announced a change in the time of release of Consumer Price Index (CPI) and Index of Industrial Production (IIP) data related to retail inflation from 5:30 pm on the 12th of every month to 4 pm.

Earlier time of data release:

• Till June 2013, CPI and IIP data were released on the 12th of every month around 11-11:30 am.
• CPI data is an important indicator for the Indian economy which can affect trading especially in the foreign exchange and government bond markets.
  • This year there were some reports of the data being leaked before its official release. Due to this, the Ministry received many representations to specifically shift the time of release of CPI data to after market hours.
• Following these representations, MoSPI changed the time of release of CPI and IIP data to 5:30 pm from July 2013 as the foreign exchange market and government bond market close at 5 pm.
  • CPI data has always been released on a monthly basis.
• Wholesale Inflation data was released on a weekly basis till December 2012. Currently, it is released around noon on the 14th of every month.

Need for latest revision:

• According to MoSPI, the revision in the time of release of data is being done to provide more time for access to CPI and IIP data.
• The new time is aligned with the closing time of major financial markets in India.
  • However, certain financial markets sensitive to inflation data such as the government bond market and the foreign exchange futures market remain open till 5 pm.
• CPI and IIP play an important role in economic policy and financial markets by reflecting inflation trends in rural, urban and combined sectors and industrial growth in the country.
• This time adjustment also adheres to MoSPI's commitment to transparency in data dissemination and access to data.

Importance of CPI and IIP Data

CPI Data:

• CPI measures changes over time in the general level of prices of goods and services that households buy for consumption.
• It is used as a macroeconomic indicator of inflation and as a tool for monitoring inflation targeting and price stability by governments and central banks.
• It is also used as a deflator in national accounts.
• Inflation is the rate at which the prices of selected goods and services increase over a period of time. The most popular indicator is the Consumer Price Index (CPI) which is calculated by measuring the year-on-year change in the CPI.
• Currently, the CPI (combined) is the most important indicator for retail inflation. From 2015, its base year was changed from 2010 to 2012.

IIP data:

• IIP data measures the amount of change in industrial production in an economy which reflects the general level of industrial activity in the country.
  • Currently, its base year is 2011-12.
• It covers industrial growth in three sectors ‘mining, manufacturing and electricity’ and various use-based categories such as basic goods, capital goods, intermediate goods, consumer durables and consumer non-durables.
• IIP is seen as an important short-term indicator of industrial development until the annual Survey of Industries and National Accounts Statistics are released.