ISLAMABAD, May 27: The government has decided to expand and restructure the basket of consumer price index (CPI) to 53 cities to make it more representative of the country’s inflation rate.

Informed sources told Dawn that 18 more cities would be added for price collection. Currently, regular prices are collected from only 35 cities. Similarly, the number of items would also be enhanced from the current 375 items.

These sources said that an exercise was currently in progress to ascertain how many new items could be included in the inflation basket and how much new staff would need to be recruited for the purpose.

A final decision would be taken next week whether the change of basket and expansion in coverage should be implemented with effect from next fiscal year or a year later to ensure consistency in the methodology.

Currently, the Federal Bureau of Statistics (FBS) has its own offices and field staff in 35 cities. The additional 18 cities would be covered through regular visits from these 35 offices but with higher staff strength.

The 375-item CPI was last restructured in 2000-01 from base year 1990-91. The government says the consumption pattern in the country has changed in the last five years and hence the need for rebasing the CPI basket.

But more importantly, it claims that about 23.4pc weight of house rent in CPI-basket was erroneously kept unrealistically high in 2000-01 which should be corrected.

The sources, however, said the FBS has been monitoring the construction sector for the last 15-months to analyse its trend which showed that either construction material was going up or the house rents but the end result remained more or less the same.

The government had assigned the task of rebasing the CPI to the IMF for independent and professional handling about a year ago which has given its professional input. Currently, various international organisations like UNDP and DFID are being consulted in the finalisation of exercise on methodology of price collection to plug any loopholes at the very beginning otherwise the people may accuse the government of manipulating the CPI weight box for political reasons.

They said Secretary Statistics Division Asad Elahi has been conducting different exercises on CPI rebasing and examining the weightage of house rent in the last 15 months. The average weight to house rent, these sources said, has remained more or less the same mainly because of rise in construction cost and as a result in rent as well.

In the existing CPI, food and beverages sector has the highest weight of 40.34 per cent, followed by 23.43 per cent house rent. Wheat flour alone has a 5.1 per cent weight. Fuel and lighting and transport and communication sectors together have a weight of 14.61. This includes 7.29 per cent fuel and lighting and 7.32 per cent transport and communication.

Similarly, the apparel, textile and footwear sector contains 6.10 per cent weight in the basked while cleaning, laundry and personal appearance sector has 5.88 per cent share. Household, furniture and equipment has 3.29 per cent share while education and medical care has 2.07 per cent share.