The Consumer Price Index for Industrial Workers (CPI-IW) is a vital statistical indicator, or concept, that measures the average change in retail prices of a fixed basket of goods and services consumed by industrial workers' families over time. It is compiled and published monthly by the Labour Bureau under the Ministry of Labour and Employment, Government of India.
The index's origin traces back to the deteriorating economic condition of workers due to abnormal price rises following World War I. The earliest such index was the Bombay Cost of Living Index, introduced in 1934–35 for textile workers. The need for a unified measure led to the creation of the All-India Consumer Price Index for Industrial Workers in 1946, with 1944 = 100 as its base year. The CPI-IW was created to solve the problem of adjusting wages to inflation, ensuring that the real wages of industrial workers were protected from price rises.
The CPI-IW is constructed using the Laspeyres formula, which measures the percentage change in the cost of purchasing a fixed basket of goods and services between the base period and the current period. Retail prices are collected monthly from approximately 317 markets across 88 industrially significant centres. The index is used as the official benchmark for calculating and revising the Dearness Allowance (DA) for Central and State Government employees, public sector workers, and for the fixation and revision of minimum wages under the Minimum Wages Act, 1948.
The CPI-IW series has been revised multiple times to reflect changing consumption patterns. The latest revision replaced the 2001 = 100 series with the 2016 = 100 series, which became effective from September 2020. This revision updated the consumption basket and expanded the geographical coverage to 88 centres. The CPI-IW is one of four types of Consumer Price Indices in India, the others being CPI for Agricultural Labourer (AL), CPI for Rural Labourer (RL) (all compiled by the Labour Bureau), and the CPI (Rural/Urban/Combined) or CPI-C (compiled by the National Statistical Office).