New Delhi, Oct. 7 -- India's ministry of statistics has released a discussion paper on how items given away free by the public distribution system (PDS) should be treated by the Consumer Price Index (CPI). This is a laudable effort to reach out to all stakeholders in a bid to improve the country's tracker of retail inflation.

The ministry's objective is to "update item weights, revise the consumption basket and incorporate methodological improvements" to make the CPI compiled by it "more robust, resilient and effective."

The importance of this exercise cannot be over-emphasized. Inflation data drawn from this index is a key economic indicator with multiple applications.

One, the central bank uses CPI-based inflation as its principal ga...