Price statistics are important because they are used in analysing economic activities and in formulating economic policies. The Consumer Price Index (CPI) is the most widely used and best known measure of the changes in the cost of living and inflation. However, none of the indices that are currently compiled are reliable indicators of inflation in Sri Lanka.There is, therefore, a need for a new index to serve as a general inflation indicator, where the reference population is the entire population. The new CPI should be based on a specially designed Household Expenditure Survey (HES) that should be undertaken purely for designing weights for the CPI. The compilation of the CPI and all aspects relating to data collection, compilation and processing as well as the publication of the CPI should be the responsibility of one state authority only and should be subject to confidentiality and statistical legislation. While the need for a new CPI has been accepted in principle, there has been no commitment on the part of users and the Government to introduce one. It is suggested, however, that the Department of Census and Statistics should set up a time table for revising the CPI.