Consider the following statements with reference to the Consumer Price Index CPI data before the uni...........

Economic Affairs Others

Consider the following statements with reference to the Consumer Price Index (CPI) data before the unification of the CPI.

When the Pay Commissions recommended pay revisions, the base was the CPI Industrial Workers (IW).
CPI for Agricultural Labourers (AL) was used for revising minimum wages for agricultural labourers in different states.

Which of the above is/are correct?

1 only

2 only

Both 1 and 2

None

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Explanation:

Statement 1: CPI-IW specifies the government employees (other than banks’ and embassies’ personnel). The wages/salaries of the central government employees are revised on the basis of the changes occurring in this index, the dearness allowance (DA) is announced twice a year.

CPI for the Urban Non-Manual Employees (CPI-UNME) is basically used for determining dearness allowances (DAs) of employees of some foreign companies operating in India (i.e. airlines, communications, banking, insurance, embassies, and other financial services).

Statement 2: The governments at the centre and states remain vigilant regarding the changes in CPI-AL as it shows the price impact on the most vulnerable segment of the society, this segment spends almost 75 per cent of its total income on the purchase of food articles.