Prelims level : Economics Mains level : Technology, Economic Development, Bio diversity, Environment, Security and Disaster Management
No Set Found with this ID

Why in News:

  • Retail inflation quickened to a six-month high of 2.92% in April, driven in large part by accelerating food and fuel inflation,


  • Growth in the consumer price index (CPI) quickened in April from 2.86% in March. Moreover, food inflation continued to rise with sustained upward momentum in fruits and vegetables.

Consumer Price Index (CPI):

  • Consumer Price Index (CPI) is based on the final prices of goods at the retail level. Because of the wide disparities in the consumption baskets for different segment of consumers, India has adopted four CPIs
  • CPI (Industrial Workers)
  • CPI (Urban Non- Manual Employees) CPI (Agricultural Labour)
  • CPI (Rural Worker)
  • In India, RBI uses CPI (combined) released by CSO for inflation purpose with base year as 2012.

Wholesale Price Index (WPI):

  • Wholesale Price Index (WPI) is based on the price prevailing in the wholesale markets or the price at which bulk transactions are made.
  • It includes three components
  • Manufactured products
  • Primary Articles
  • Fuel and power
  • It is measured by Ministry of commerce and industry with base year as 2011-12
  • Data on Wholesale Price Index (WPI) is available every week, while data on Consumer Price Index (CPI) is only available every month, so there is a time lag in CPI data availability compared to WPI data availability, which can impact decision making both for RBI and the Government of India.


  • Inflation is a rise in the general level of prices of goods and services in an economy over a period of time. When the general price level rises, Each unit of currency buys fewer goods and services. This implies that: The purchasing power of money gets eroded. There is a loss in real value of money as medium of exchange and unit account in the economy. Inflation has good as well as bad impacts for economy.
Share Socially