(i) To calculate rate of inflation for CPI of industrial workers, non-manual workers, agricultural labourers and WPI for each year, we will use the given formula: Rate of Inflation =\(\left\{ \frac { PriceIndexofCurrentYear }{ PriceIndex0f\frac { Previous }{ Base } Year } \times 100 \right\} \)
By using this formula the inflation rate for each year will be calculated.
(ii) The inflation rate has been continuously rising and it has much affected to agricultural labourers. There is much increase in wholesale price index and it has shown persistent rise in prices.
(iii) Yes, the relative values of the index numbers are comparable, but it is time consuming.

Collect the information with the help of your family member and calculate the CPI from family budget method:
W= Weights
Price relative R = for each item
CPI = \(\sum { } \)WR/\(\sum { } \)W
Also, write the effect of change in price on your family's expenditure.

Construction of cost of living index number by family budget method:

Cost of living index for 2004
CPI = \(\sum { } \)WR/\(\sum { } \)W= 13449.9/100
= 134.499
Thus, there is increase of 34% in prices of 2004 with that of 1995.

Let total weight be equal to 100 and WI and W2 be the weight of food and other items respectively. Therefore,
W_I + W₂ = 100
CPI = 125
\(\sum { } \)WR = 120W_I + 135W₂
CPI = \(\sum { } \)'WR/\(\sum { } \)W
125=\(\frac { 120{ W }_{ 1 }+135W_{ 2 } }{ 100 } \)
12500 = 120W_I + 135W₂ ... (ii)
By solving equation (i) and (ii), we get,
W_I = 66.66% and W₂ = 33.33%.
It means weight given to food is 2/3 and that of other items is one-third.

When CPI of base year is 100 and current year is 400 then his salary should be \(\frac { 4000\times 400 }{ 100 } =16,000\) Therefore, he needs an increment of 10000 rupees to maintain same standard of living.

(i) Food
(ii) Clothing
(iii) Fuel
(iv) Education
(v) Health.

General index presents the growth performance of the industrial sector over all. It also shows broad industrial categories' index numbers. It also shows that manufacturing has highest share in general index.

CPI = \(\frac{\Sigma R W}{\Sigma W}\) 
\(=\frac{18459.1}{100}\) = 184.6
Prices have risen by 84.60% in 2005 as compared to the prices in 1980.

Yes, the CPI number of urban non manual employees represents the changes in the cost of living of the president of India because it includes the government employees whether they belong to low paid jobs or high paid jobs. President of India is a part of high paid government employee. Their typical consumption basket is having different patterns but this group is least affected by changes in cost of living.

Price Index Numbers: Price index number measures the changes in the price level of one commodity or group of commodities between two points of time or two areas.
Example: Wholesale price index numbers; Retail price index numbers, Consumer price index numbers.
Quantity index number: Quantity index numbers measures the changes in the volume of production, sales, etc in different sectors of economy with respect to time period or space. For example, indices of agriculture production, industrial production, exports, imports etc.

Different categories of consumers have a different consumption pattern. CPI aims at measuring change over time in the price paid by the ultimate consumer for a specified quantity of goods and services. If goods and services which are included in estimation of price index are irrelevant then CPI also becomes irrelevant. For example, there is a wide gap in food items to be included in CPI for urban areas and CPI for rural areas. In some states rice is the main food in others, it is wheat. Therefore, keeping in mind the consumption pattern of different categories of consumers, we need to find different CPI for different consumer categories.

Desirable properties of a base year are as follows:
(a) The base period must be a normal period i.e. a period frees from all sorts of abnormalities or random fluctuations such as labor strikes, wars, floods, earthquakes etc.
(b) The base period should not be too distant from the given period. Since index numbers are essential tools in business planning and economic policies the base period should not be too far from the current period. For example for deciding increase in dearness allowance at present there is no advantage in taking 1950or 1960as the base, the comparison should be with the preceding year after which the DA has not been increased.
(c) Fixed base or chain base.While selecting the base a decision has to be made as to whether the base shall remain fixing or not i.e. whether we have fixed base or chain base. In the fixed base method the year to which the other years are compared is constant. On the other hand, in chain base method the prices of a year are linked with those of the preceding year. The chain base method gives a better picture than what is obtained by the fixed base method.

Construction of Index Numbers

Lapeyre's Method \({ P }_{ 01 }^{ pa }=\frac { \sum { { p }_{ i }{ p }_{ 0 } } }{ { p }_{ o }{ q }_{ o } } \times 100=\frac { 382 }{ 335 } \) x 100 = 114.02
Lapeyre's Method \({ P }_{ 01 }^{ pa }=\frac { \sum { { p }_{ i }{ p }_{ 0 } } }{ { p }_{ o }{ q }_{ o } } \times 100=\frac { 408 }{ 355 } \) x 100 = 114.92
Fisher's Method = \(\sqrt { \frac { \sum { { p }_{ 1 }{ q }_{ 0 }\sum { { p }_{ 1 }{ p }_{ 1 } } } }{ \sum { { p }_{ 0 }{ p }_{ 1 } } \sum { { p }_{ 0 }{ q }_{ 1 } } } } \times 100=\sqrt { \frac { 382\quad 408 }{ 335\quad 355 } } \) x 100 = 114.46

Construction of Index Numbers