Published on: July 12, 2021



What is in news : Inflation has remained above 6%

Other details :

RBI estimate of inflation for 2021-22 was 5.1%


  • What is inflation : Inflation refers to the rise in the prices of most goods and services of daily or common use, such as food, clothing, housing, recreation, transport, consumer staples, etc.
  • How is inflation measured in India – By consumer price index and wholesale price index


            Wholesale Price Index                  Consumer Price Index

Measures the changes in the prices of goods sold and traded in bulk by wholesale businesses to other businesses

Measures price changes from the perspective of a retail buyer

Four types of CPI are as follows:

CPI for Industrial Workers (IW).

CPI for Agricultural Labourer (AL).

CPI for Rural Labourer (RL).

CPI (Rural/Urban/Combined).

Published by the Office of Economic Adviser, Ministry of Commerce and Industry

First three are compiled by the Labour Bureau in the Ministry of Labour and Employment. Fourth is compiled by the NSO
Base year – 2011-12 Base Year – 2012.
Tracks inflation at the producer level

Captures changes in prices levels at the consumer level

Other details :

  • The Monetary Policy Committee (MPC) uses CPI data to control inflation.
  • In April 2014, the Reserve Bank of India (RBI) had adopted the CPI as its key measure of inflation.
  • Inflation measures the average price change in a basket of commodities and services over time.
  • Inflation is indicative of the decrease in the purchasing power of a unit of a country’s currency.