CPI-based inflation rate fell to 4.87 percent in October:  Basics Explained

As per the data released by the National Statistical Office (NSO) India’s consumer price index (CPI)-based inflation rate fell to 4.87 percent in October (it was 5.02 percent in September). Food inflation, which accounts for nearly half of the overall consumer price basket, rose 6.61% in October as compared with 6.56% in September.

 CPI-based inflation in October was below the Reserve Bank of India’s (RBI) upper tolerance band of 4-6% for a second consecutive month but the central bank last month kept its key lending rate steady for a fourth consecutive policy meeting and said it remains focused on bringing inflation close to the target of 4%.


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 costs, taxes 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 onlyGoods 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
Base Year:2011-122012

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


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