The base year to calculate CPI-IW is 2016.

The Consumer Price Index for Industrial Workers (CPI-IW) is an important economic indicator that measures the changes in the prices of goods and services consumed by industrial workers in India. It is calculated by the Labour Bureau, under the Ministry of Labour and Employment, Government of India.

Significance of base year:

The base year is a reference year against which the changes in the price levels of goods and services are measured. It provides a benchmark for comparing the current prices with the prices of the base year. The base year is chosen based on various factors such as availability of data, stability of the economy, and representativeness of the consumption basket.

Reasons for choosing 2016 as the base year:

1. Availability of data: The base year should have sufficient data on prices and consumption patterns. The Labour Bureau has access to a wide range of data sources, including price indices, consumer expenditure surveys, and other statistical data. The availability of reliable and comprehensive data for the year 2016 makes it suitable as the base year.

2. Stability of the economy: The base year should be a period of relative stability in the economy. 2016 was chosen as the base year because it represents a period of stability in terms of economic growth and inflation. It provides a reliable reference point for measuring the changes in prices over time.

3. Representativeness of the consumption basket: The consumption basket used in the calculation of CPI-IW should be representative of the goods and services consumed by industrial workers. The base year should reflect the consumption patterns and preferences of the target population. The consumption patterns of industrial workers are likely to change over time, and 2016 is considered to be a recent year that provides a reasonably accurate representation of their consumption basket.

Conclusion:

In conclusion, the base year to calculate CPI-IW is 2016. The choice of the base year is based on factors such as availability of data, stability of the economy, and representativeness of the consumption basket. The base year provides a benchmark for measuring the changes in the prices of goods and services consumed by industrial workers in India.