Retail Inflation Eases in July
The Ministry of Statistics and Programme Implementation releases Retail Inflation data. India’s retail inflation, based on the Consumer Price Index (CPI), for July stood at 1.55 per cent, down from 2.10 per cent in June
A sharp increase in food prices drives Inflation. Food inflation rose sharply to 9.2 percent in September from 5.66 percent in the preceding month. An acceleration in the prices of vegetables (35.99 percent) and fruits (7.65 percent) caused this sharp uptick.
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
| WPI | 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 |
| Base Year:2011-12 | 2012 |
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
A situation in which prices are brought down moderately from their higher level. without any adverse impact on production and employment.
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