By Sanjeevi Jayasuriya
The Department of Census and Statistics (DCS) which currently publish two consumer price indexes (CPIs) will go for a new price index from end of this year, said Director General DCS A. G. W. Nanayakkara on Thursday.

Speaking at a media conference, he said that the Colombo City CPI which is the official CPI in the country established in 1952, needed modifications as it is less representative in the current context. The need for a new CPI arose a long time back, but due to various reasons it was not possible until a few years ago, Nanayakkara said. The new index which is based on the ‘income and expenditure’ survey 1995/96, has been constructed by the DCS on a trial basis.

The weights for the selected food and non-food items of the lower 80 per cent of the country’s households based on the consumption expenditure at all island level had been taken when preparing the new index which will be called the Sri Lanka Consumers’ Price Index (SLCPI). The three-year period 1995- 1997 is the base period for the computation of the SLCPI and the data had been collected from over 20,000 households during one complete year capturing the seasonal variations.

The CPI basket contains important goods and services commonly consumed by the households, Nanayakkara said. It is neither practical nor necessary to include every item purchased by the consumers as many related items show similar changes in the price trends, he said. The geographical coverage for price collection of new indexes has been widened to cover 20 districts and with the restoring of peace in the North and East it is expected to collect data from these areas as well, he noted.

The household monthly consumption expenditure of selected items of food and non-food in the island for ‘market basket’ of the new SLCPI have registered 89.2 percent of the total expenditure by 80 percent of the households, Nanayakkara explained. The remaining items cover only 10.8 percent and the percentages of these items re-distributed within homogeneous categories according to a percentage share of each already selected, he said.

The re-valuation of the market basket from the survey period 1995 to 1997 = 100, using average prices for this period returned an expenditure value of Rs. 4785.96 which means that a change in one point in this index is Rs. 47.86, Nanayakkara said. This is more realistic considering the price changes at present and one would think that this is a slow moving index, he said. The average household size was 4.3 at the survey conducted while the average household expenditure for 80 percent of the total household amounted to Rs. 4,515.47 per month, he added.