Consumer Price Indices (Rural, Urban, Combined), compiled by the Ministry of Statistics and Programme Implementation, reflects the realistic picture of the prices of consumer goods and services because of the following reasons:

• prices are collected from 1,181 selected village markets covering all districts of the country for rural areas and from 1,114 urban markets of 310 selected towns of urban areas;
• these markets are, more or less equally, distributed over different weeks of a month to capture price variations during the month;
• only transaction prices, that is prices actually paid by the consumers, are collected for compilation of indices;
• the items having significant share in the overall consumption expenditure of the households, including the Public Distribution System (PDS) items and the items consumed by majority of the households are included in the basket; and
• specifications of items have been fixed, market wise, on the basis of popularity of the varieties and common buying behaviour, including common quantity purchased in that area.

Further, in the web – based data collection of rural and urban prices, there are facilities for checking real time uploading status and scrutiny of prices.

This was stated by Shri D. V. Sadananda Gowda, Minister of Statistics and Programme Implementation in a written reply to a Question in Rajya Sabha today.

Consumer Price Index accuracy ensured by representative market sampling, transaction based prices, and real time data scrutiny. The Consumer Price Index presents a realistic price picture by using actual transaction prices from a nationally distributed sample of rural and urban markets, staggered across weeks to capture intra month variation; market wise item specifications and common purchase quantities reflect local buying behaviour, while the basket prioritises items with significant household consumption shares including Public Distribution System items, and web based collection provides real time upload monitoring and scrutiny for data quality.