Change of Base Year of Consumer Price Index of Industrial Workers: Railway Board

Change of Base Year of Consumer Price Index of Industrial Workers (Labour Index): Railway Board Order dated 06.09.2021

भारत सरकार Government of India
रेल मंत्रालय Ministry of Railways
(रेलवे बोर्ड) (Railway Board)

No. 2021/CE-I/EDCE(G)/Misc./3/LabourIndex

New Delhi, Dated 06.09.2021

To,
As per list attached

Sub: Change of Base Year of Consumer Price Index of Industrial Workers (Labour Index)

1. RBI has published Consumer Price Index for Industrial Workers, CPI(IW), with the base year 2001 up to, August 2020. After August 2020, CPI(IW) has been published by RBI with the base year 2016. The base year of Consumer Price Index for Industrial Workers i.e. CPI(IW) has been changed from year 2001 to year 2016 with effect from September 2020. Further, RBI has provided a linking factor of 2.88 between the old series and the revised series.

2. The Clause 46A of GCC deals with the price variation clause in contracts. Formulae used for the calculation of the amount of variation in the price for labour components require consumer price index for industrial worker-All India; published in RBI Bulletin.

3. The issue has been examined. It has been decided by Board (MI, MF) to adopt above linking factor of 2.88 for linking index of Base year 2001 and 2016. Example for applying linking factor is as under:

  • The amount of variation in prices in labour is worked out by the following formulae
L= W x (LQ-LB)


LB

X LC


100

 

L­ – Amount of price variation in Labour

W- Gross value of work done by Contractor as per on-account bill(s) excluding cost of material supplied by railway at fixed price, minus the price value of cement and steel. This will also exclude specific payment, if any, to be made to the consultants engaged by Contractors (such payment shall be indicated in the Contractor’s offer)

LB– Consumer Price Index for Industrial Workers- All India: Published in RBI bulletin for the base period

LQ-Consumer Price Index for Industrial Workers-·All India: Published in RBI bulletin for the average ·price index of the 3 months of the quarter under consideration

LC– % of labour Component

Item Base Year Linking Factor Consumer Price Index for Industrial Workers
July-2020 Aug-2020 Sept-2020
Consumer Price Index for Industrial Workers- CPl(IW) 2001 336 338
2016 2.88 118

Sept 2020 CPl(IW) of Base Year 2001= Sept 2020 CPl(IW) of Base Year 2016 x Linking Factor i.e 118-x 2.88 = 339.84

LQ = (336+338+339.84)/3 i.e 337.95

4. This issues with ‘the concurrence of Finance Directorate of Ministry of Railways.

(प्रेम सागर गुप्‍ता)
कार्यपालक निदेशक स‍िविल इंजीनियरिंग(जी)/रेलवे बोर्ड
[Rly No. 030-44803, MTNL No.-011-23383379]

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Also check the following links related to this topic:

All-India Consumer Price Index for Industrial Workers for the month of July, 2021

All India Consumer Price Index for Industrial Workers for June, 2021

All-India Consumer Price Index for Industrial Workers (AICPIN) for the month of May, 2021

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