Retail Inflation Rises in November: Basics Explained

According to data released by the National Statistical Office (NSO), retail inflation rose to a three-month high of 5.55 percent in November. The Reserve Bank of India(RBI) has projected that the consumer price index inflation for 2023-2024 is likely to be 5.4%

 The RBI tolerance range is 2-6%, within which inflation has remained for the third month. However, inflation has been above the medium-term 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 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 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 employment.


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