India’s consumer price index (CPI) inflation eases sharply to 4.7% in April 2023, coming within the Reserve Bank of India’s upper tolerance limit of 6%.
The easing in CPI comes due to a steep decline in food inflation. The consumer food price index (CFPI) comes at 3.84% in April 2023 versus 8.31% in the same month a year ago. In March 2023, food inflation was at 4.79%.
LEARNING FROM HOME/ WITHOUT CLASSES/ BASICS
Consumer Price Index(CPI) looks at the price at which the consumer buys goods, the Wholesale Price Index(WPI) tracks prices at the wholesale, or factory gate/mandi levels.
WPI only tracks basic prices devoid of transportation cost, taxes and the retail margin etc. And that WPI pertains to only goods, not services.
The CPI is a measure that assesses the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care, purchased by households.
The Difference between WPI and CPI
|Calculates the average change in prices of commodities at the wholesale level.( First stage of a transaction)||At the retail level.( Final stage of a transaction)|
|Data published By: Office of Economic Advisor (Ministry of Commerce & Industry)||Central Statistics Office (Ministry of Statistics and Programme Implementation) & Labour Bureau|
|Covers Goods only||Goods and Services both|
|Manufacturers and wholesalers (Producer Level)||Consumers (Consumer Level)|
|Manufacturing inputs and intermediate goods like minerals, machinery basic metals, etc.||Education, communication, transportation, recreation, apparel, foods and beverages, housing and medical care|
In April 2014, the RBI had adopted the CPI as its key measure of inflation.( Urjit R. Patel Committee report recommendations
INFLATION: It is an economic condition in which prices of goods and services rises and value of money falls or money circulation exceeds the production of goods and services.
DISINFLATION: It refers to a situation in which prices are brought down moderately from its higher level without any adverse impact on production and employment.