Can the CPI for urban non-manual employees represent the changes in the cost of living of the President of India?
No, the CPI for urban non-manual employees cannot represent the changes in the cost of living of the President of India.
The Consumer Price Index measures the average change in retail prices for a specific category of consumers based on their typical consumption basket. Different categories of consumers have different consumption patterns, which is why it is essential to have different CPI for different categories of consumers.
The President of India belongs to a completely different socio-economic category with a consumption pattern vastly different from urban non-manual employees. The weights assigned to items like food, fuel, rent, and other goods in the CPI basket are based on the spending pattern of urban non-manual employees, not the President. Therefore, the CPI for urban non-manual employees cannot accurately reflect the changes in the cost of living for the President of India.
Explanation
The textbook context emphasizes that different CPI indices exist for different categories of consumers (industrial workers, agricultural labourers, rural labourers, etc.), implying that consumption patterns vary across groups. The CPI calculation uses specific weights for different items based on the typical consumption basket of that particular group. Since the President of India has a unique consumption pattern very different from urban non-manual employees, the CPI for urban non-manual employees cannot accurately measure the President's cost of living changes.