DCS denies allegations against CCPI :
No cooked statistics
The Department of Census and Statistics (DCS) denied a recent article
published in an English Weekly that said food commodities in the basket
of commodities which measured the Colombo Consumer Price Index (CCPI),
the official consumer price index of the country became variable after
President Mahinda Rajapaksa came to power in 2005.
The Director of Prices and Wages Division of the DCS A.D.S.
Gunawardena said that this proclamation is factually incorrect.
The DCS completely denied the following comments stated in the
article. For instance, if the price of a commodity in the food
commodities basket, which is used to measure inflation, goes up by more
than 5% in a month, it is taken out of the basket on the assumption that
the consumer has gone for cheaper substitutes, thereby nullifying that
price increase in the measurement of food inflation, with the vacuum in
the food basket taken up by the substitute in what is known as the
Gunawardana said that this is a pure imagination and has nothing to
do with the calculation of inflation factor by the DCS. The CCPI
measures over a period of time, the change in the cost of a fixed basket
of goods and services commonly purchased by the majority of the urban
households, with the quantity and quality of the basket held constant at
the base period. Thus the index solely reflected price changes.
It is designed as a measurement of the impact of price changes on the
purchase of consumer goods and services among the majority of households
that a target urban population group consumes. It is estimated as a
weighted average of the prices of the Market Basket of goods and
services obtained from 12 different markets in the Colombo district, he
The Methodology of price index in Sri Lanka is compatible with the UN
standards which is followed by other countries as well. The computation
method used for the current CCPI is the same as that of the previous
CCPI (1952 base) Laspeyres formula, with fixed weights proportional to
the expenditure pattern of the base period.
The CCPI that was in force up to 2008 April had been computed using
the pattern of consumption prevalent in 1949 using 1952 as the base
year. The index was 56 years old by 2008 decades old and during the
period of (1952 - 2008), significant changes in consumer habits and
family income on the demand side, including in the range and
availability of goods and services had taken place. Therefore the
previous Price Index was no longer a good indicator of current changes
in prices of consumer goods and services. Recognizing the need for a new
and more reliable index of consumer prices, the DCS had on six previous
occasions constructed revised series of index numbers in 1960, 1972,
1978, 1983, 1990 and 2002. However, these were not adopted and in spite
of its limitations the CCPI with its outdated base of 1952 has continued
to be the sole index.
In keeping with International practice a Consumers’ Price Index
require regular revision at least every 5-10 years, to reflect changes
in consumption patterns based on current consumer expenditure surveys.
This is how a new CCPI (base 2002) was implemented by the DCS and
hence the implementation was not based on any political or other
He said that there is no controversy in the mechanism of the
calculation of the CCPI and DCS continuing it over long years
independently without any political or other interference.
Gunawardena said that the article has been written, based on some pre
conceived imaginary wishful thinking with no attempt being made to
contact the DCS for clarification and education.
However the writer is correct in stating that both liquor and
cigarettes have not been considered in keeping with the Government
policy, he said.