The government is working on a price sensitivity index for five service sectors. The index will be merged into the wholesale price index, which is used as a measure for estimating the rate of inflation.
Government officials said the sectors to be covered in the index initially included banking, insurance, telecommunications, road transport and railways.
The scope of the index could be expanded later. "The index is still at a preliminary stage and various regulatory agencies are co-ordinating with the ministry of commerce and industry to implement it," an official said.
The officials, however, did not provide any deadline for working out a comprehensive wholesale price index that would reflect the price movements in the service sector.
Once the system is implemented, a fourth component will be added in the wholesale price index to measure the price changes in the service sector, which accounts for nearly 50 per cent of the country's gross domestic product. The weight to be assigned to the sector is, however, still to be decided.
The wholesale price index has three category of products -- an index for primary articles comprising food and non-food items, manufactured products covering a gamut of product groups that are classified into the food and non-food category, and the index for fuel, power, light and lubricants. Manufactured products have the highest weight in the index at 63.75 per cent.
The sources said while the Reserve Bank of India had been assigned the task of preparing the index for the banking sector, the Insurance Regulatory and Development Authority was engaged in working out a model for the insurance sector.
In the case of telecommunications and railways, the respective ministries will be used to source data, while a private party will help the government in preparing the index for the road transport sector.
Once the framework is ready, the Central Statistical Organisation would be consulted for fine-tuning the model and implementing it, officials said.
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