Agricultural, rural labour CPI base year to be revised to 2019-20

NEW DELHI: The Labour Bureau has kick-started the exercise of revising the base year for consumer price index for agricultural and rural labourers (CPIAL/RL) to 2019-20, from 1986-87, besides developing an index for all states and Union Territories (UTs).

The index is used for determining minimum wages and those for the government’s rural jobs programme under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).

A senior government official told ETon condition of anonymity that the new index will be ready early next year. “We will do a parallel comparison for a year to arrive at a linking factor before we officially release it for public use in February 2021,” said the official.


As with other CPIs, the consumption pattern of agricultural labourers has changed. The new index will take into account significant change in the consumption basket over the past three decades and could result in upward revision in MGNREGA wages as well as minimum wages that will be determined under the Code on Wages.

Currently, CPI-AL/RL with 1986-87 base is available for only 20 states. As a practice, states or UTs with no dedicated index often use the index of neighbouring states to determine their minimum or NREGA wages. However, Sikkim, for one, had recently refused to use the index for West Bengal, saying there is significant difference in the states’ consumption baskets.

Hence, there has been a demand from some states and UTs that the government determine a separate index for each of them, depending on their consumption basket, and revise the base year to reflect the current pattern of consumption.

“We hope to address both these issues with the new index. The Labour Bureau is already halfway through in putting in place the revised index,” said the official cited earlier. “We have already identified the shops, markets and products that will be taken into account for compiling the index.” Another official said the new index will see the weightage of food items going down, while expenditure on education and health will rise.

The National Sample Survey Organisation is currently conducting a family expenditure survey for agricultural labourers to get the consumption pattern, which will be used by the Labour Bureau.

The CPI basket combines over 45% expenditure on food and beverages, 10% on housing, over 6.8% on fuel and light, 6.5% on clothing and footwear, and 18% on miscellaneous expenditure, including on education and health.