CPI (CONSUMER PRICE INDEX)
- February 19, 2022
- Posted by: OptimizeIAS Team
- Category: DPN Topics
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CPI (CONSUMER PRICE INDEX)
TOPIC: Economy
Context- The all-India Consumer Price Index for Agricultural and Rural Labourers (CPI- AL & RL) continued to decrease in January.
- The fall came from food group due to decrease in prices of pulses, mustard-oil, fresh fish, sugar, gur, onion, vegetables and fruits.
- The fall/rise in index varied from State to State.
Concept-
Consumer Price Index:
- It measures price changes from the perspective of a retail buyer.
- It is released by the National Statistical Office (NSO).
- It examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care.
- It is calculated by taking changes in price over time for each item in the predetermined basket of goods and averaging them.
- CPI is adopted as the key measure of retail inflation by the Reserve Bank of India in 2014.
- India uses 2012 as the base year for calculating CPI.
- At present, India has five consumer price indexes (CPIs), three of which are working-class specific. These are:
- CPI for Industrial Workers (IW).
- CPI for Agricultural Labourer (AL).
- CPI for Rural Labourer (RL).
- These three indexes are compiled by the Labour Bureau in the Ministry of Labour and Employment.
- CPIs AL and RL are used to fix minimum wages of agricultural labourers and rural unskilled employees.
- The other two are CPI-Urban and CPI Rural. These two indexes are compiled by the National Statistical Office (NSO) in the Ministry of Statistics and Programme Implementation.
- The combined rise in retail prices is captured by CPI Combined.
- A committee set up by the National Statistical Commission (NSC) in 2005 under the recommendation of Dr C Rangarajan Commission, has suggested that CPI-Rural and CPI-Urban could be a substitute for CPI-AL/RL and CPI-IW, respectively.