New way to calculate Inflation

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In my earlier posting way back in May 2009 mentioned the crude way of calculating inflation  but now Government of india seems to have responded to it and planning to roll out new way of calculating inflation which may be effective from August 1st 2010…

A new system of inflation measurement,under which price changes of about 250 extra items would be covered,is likely to be rolled out by the government on August 14.The present monthly inflation measurement system,based on the wholesale price index,reflects the price variations of 435 items.
The number of items would now go up to 685 and include a host of new products,including consumer goods like mobile phones and LCD televisions,sources said. Out Dated items such as typewriters and video cassette recorders (VCRs) would not find a place in the new inflation measurement mechanism.
The committee of secretaries (CoS),headed by Cabinet secretary KM Chandrasekhar,is likely to give a final shape to the new index next week.The base year of the new index would also be changed from 1993-94 to 2004-05.

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