ISLAMABAD: The Pakistan Bureau of Statistics (PBS) has completed the in-house work on the re-basing of country’s Consumer Price Index (CPI), which now requires formal approval from the competent authority for implementation.

However, the new base mechanism is likely to be implemented from 2018-19, officials sources said.

So far the base 2007-08 is being utilised for evaluating CPI, which has now gone obsolete due to the arrival of many new products in the market, a PBS official said.

After rebasing, the evaluation base year would be 2015-16, he said adding that in earlier base year much weight-age was given to urban commodities as compared to the rural ones.

The new base is expected to find a logical balance between the commodities used in urban and rural areas.

The PBS was criticized by economists and researchers for CPI’s urban bias. As a remedy, it has decided to introduce a rural CPI, an urban CPI and a total CPI.

At present, the PBS measures prices of 487 items collected from 76 markets in 40 cities across Pakistan, representing only the urban consumption basket at the exclusion of the rural households.

When 62 per cent of the population lives in rural areas, the national CPI should not only track urban consumption patterns to calculate inflation but also include the rural economy.

It is pertinent to mention here that the base is being formulated after reviewing the surveys of Industrial Census and Census of Manufacturing Industries (CMI).

The CMI have collected data from field and so far five meetings of technical committee have been conducted for the formulation of CPI, hoping the the new base to be operational from the next fiscal year (2018-19).

The current base of 2007-08 was scheduled to be changed in year 2015-16 and thereafter every ten years.

However, the process of rebasing witnessed some delay, which the sources attributed to the population census held across the country in 2017.

Published in Dawn, January 3rd, 2018