The construction of an index number is not an easy task. Various problems hamper the construction of index number such as; what should be the base year, which commodities should be included, how should the weights allocated to each commodity etc. These are some of the problems which make it difficult to construct an index number on regular basis. The important problems of index number are discussed below. / 

1. Defining Purpose: In the construction of index number, the defining purpose is the important step and indicates the purpose of measure to be calculated. Since the choice of weights, commodities, and base year all depend on the purpose of measure therefore it is necessary to define it before the construction of an index number. / 

2. Commodities to be included: Selection of the commodities is an important problem in the construction of index number. The commodities should be relevant, comparable, representative and reliable./ 

3. Determination of weights: When the selection process of commodities is completed, the next step is the determination of weights to each commodity. The determination of weights depends upon the relative importance attached to each commodity. But the importance of a commodity varies with place, time and the habits of those who use or trade in it. / 

4. Collection of Prices:Collection of prices is also an important problem for the construction of index number. It requires a lot of time and financial resources to collect the information about actual prices on regular basis. /

 5. Choice of base Year: A base year should be a normal year, because it is the year to which all other are compared. The base year should be free from all hazards that affect the economy of the country e.g. floods, wars, earth quakes etc.