- December 10, 2021
- Posted by: OptimizeIAS Team
- Category: DPN Topics
Subject – Economy
Context – ‘India’s retail inflation likely accelerated in Nov. to 5.1%’
- The change in the consumer price index over a period of time is referred to as CPI-based inflation, or retail inflation.
- The CPI is an index measuring retail inflation in the economy by collecting the change in prices of most common goods and services used by consumers.
- The CPI is calculated for a fixed list of items including food, housing, apparel, transportation, electronics, medical care, education, etc.
- The CPI specifically identifies periods of deflation or inflation for consumers in their day-to-day living expenses.
The CPI is used as a:
- Macroeconomic indicator of inflation;
- Tool by the central bank and government for inflation targeting and for inspecting price stability; and
- Deflator in the national accounts.
Consumer Price Index in India
- In India, there are four consumer price index numbers, which are calculated, and these are as follows:
- CPI for Industrial Workers (IW)
- CPI for Agricultural Labourers (AL)
- CPI for Rural Labourers (RL) and
- CPI for Urban Non-Manual Employees (UNME)
- The Ministry of Statistics and Program Implementation collects CPI (UNME) data and compiles it but the remaining three are collected by the Labour Bureau in the Ministry of Labour.