The year-on-year inflation rates based on the all-India Consumer Price Index for Agricultural Labourers (CPI-AL) and Rural Labourers (CPI-RL) for July this year declined to 0.77 per cent and 1.01 per cent, respectively, bringing respite to poor households, figures released by the Ministry of Labour and Employment on Thursday showed.

The food inflation for agricultural and rural labourers entered the negative zone at -1.56 per cent and -1.13 per cent respectively, as prices of food items fell during the month due to increased production.

There has also been a decline in inflation for farm and rural workers compared to the previous month of June for which the year-on-year inflation rates stood at 1.42 per cent and 1.73 per cent respectively.

The inflation rate for agricultural and rural labourers has been steadily declining over the last nine months. This comes as a welcome relief for these vulnerable segments that are hit hardest by skyrocketing prices. It also leaves more money in their hands to buy a wider range of goods, leading to a better lifestyle.

The Labour Bureau, Ministry of Labour & Employment has revised the base year of the Consumer Price Index Numbers for Agricultural Labourers and Rural Labourers to 2019=100 since June this year. These indices are based on data collected from a set of 787 sample villages across 34 States and UTs.

The newly-constructed CPI – AL & RL series (Base: 2019=100) replaces the earlier 1986-87=100 series.

The revised series has significantly enhanced the scope and coverage and incorporated many methodological changes in order to make the indices more robust. For instance, the weighting diagrams (share of expenditure to total expenditure) have been revised due to changes in consumption patterns.

Then there is the use of the Geometric Mean (GM) in place of the Arithmetic Mean (AM), as GM moderates the volatility in prices and use of the latest classification of individual consumption according to purpose, in line with the Classification of Individual Consumption by Purpose (COICOP)-2018.

Calculation of prices of PDS items has been done using the admissibility concept instead of availability as in the old series; the revised series covers 34 States and UTs as against 20 States in the old series; prices are collected from 787 sample villages as against 600 villages in the old series; and cover 150–200 as against 65–106 items in the old series.