11.1.1 The price indices in the system of economic statistics are closely watched indicators of macro-economic performances. They are direct indicators of the purchasing power of money in various types of transactions involving goods and services. As such, they are also used as deflators in providing summary measures of the volume of goods and services produced and consumed. Consequently, these indices are important tools in the design and conduct of the monetary and fiscal policy of the Government, and also of great utility in taking economic decisions throughout the private sector. In India, for these varied purposes Central and State Government agencies collect the primary data on prices. There are mainly three agencies namely, Labour Bureau in the Ministry of Labour, Office of Economic Adviser in Ministry of Industry and Central Statistical Organisation in the Ministry of Statistics and Programme Implementation responsible for the compilation and release of various indices. This chapter deals with the issues relating to a range of consumer price indices, wholesale price index number and the price collection mechanism.
