According to GCCI president Mukesh Patel, the new composite index should include service and transportation charges so as to judge the need for changes in pattern of investment, interest rates and real exchange rate of the rupee.

In a letter to Union Finance Minister Yashwant Sinha, Patel expressed concern at the mismatch between the wholesale price index and the consumer price index. The current low rate of inflation as measured by the wholesale price index did not reflect the real inflation rate in the economy due to absence of contribution of services in the calculation and differing year base, Patel said.

Patel pointed out that while the rate of inflation was coming down, prices of essential consumer goods in urban and rural areas were spiralling continuously. ``Thus, empirical results show that divergence between wholesale price index and consumer price index is widening which indicates a possible distortion in their relationship'' he said.

Although a certain degree of mismatch is unavoidable in the movements of two series, yet wholesale and retail markets need to be interlinked to ensure a stable relationship between them. Patel has urged the Finance Minister to review the matter urgently.

Patel also expressed concern at the mysterious fall in the annual inflation rate to 1.19 per cent last month, the lowest in the past two decades, which was though that was largely due to perceptible fall in food price following a record farm production and slowdown in industrial growth.

``Thus, falling rate of inflation is a relief but it reflects stagnation of economy,'' he said.