What does a consumer price index for industrial workers measure?
The Consumer Price Index for Industrial Workers measures the average change in retail prices of a typical basket of commodities consumed by industrial workers. It is also known as the cost of living index for industrial workers.
This index indicates the amount an industrial worker needs to spend in the current period compared to the base period to buy an identical basket of commodities. For instance, if the CPI for industrial workers (2001=100) is 277 in December 2014, it means that if an industrial worker spent Rs 100 in 2001 for a typical basket, he would need Rs 277 in December 2014 to purchase the same basket.
The index essentially measures the purchasing capability of industrial workers and reflects changes in their cost of living over time.
Explanation
The textbook clearly states that CPI measures the average change in retail prices and is also called the cost of living index. The example given (CPI for industrial workers = 277 in December 2014 with base 2001=100) illustrates that it shows how much more an industrial worker needs to spend to buy the same basket of commodities compared to the base year. The key point is that it measures whether the worker has the capability to buy the basket, not whether they actually buy it.