In India, CPI (combined) is declared as the new standard for measuring inflation (April 2014). CPI numbers are typically measured monthly, and with a significant lag, making them unsuitable for policy use. India uses changes in the CPI to measure its rate of inflation.
What is the CPI rate in India?
During the last meeting, RBI maintained the projected CPI inflation at 5.3 per cent during the ongoing financial year 2021-22. It estimated CPI inflation at 5.7 per cent in Q4 with risks broadly balanced.
How is CPI measured in India?
Currently, CPI in India is calculated by taking a basket of 299 commodities as compared to 676 commodities in WPI. Basically, CPI is calculated by considering the retail price change of goods and services and by taking the average weighted value of each item in the basket.
Why is CPI used in India?
CPI measures the change in the price level of goods consumed by retail consumers, who are on the demand side of the economy. … It is used as an essential economic tool by central and state governments, the Reserve Bank of India, which is the central bank of our country for maintaining money supply, price stability.
Is CPI used to measure inflation in India?
The two main indicators of inflation in india are the wholesale price index (Wpi) and the consumer price index (cpi).
Who measures WPI in India?
The WPI is published by the Economic Adviser in the Ministry of Commerce and Industry. The Wholesale Price Index focuses on the price of goods traded between corporations, rather than the goods bought by consumers, which is measured by the Consumer Price Index.
WHO publishes WPI in India?
WPI data is published by the Office of Economic Adviser, Ministry of Commerce and Industry, while CPI data is published by the National Statistical Office (NSO), Ministry of Statistics and Programme Implementation (MoSPI).
Does India use WPI or CPI?
India uses changes in the CPI to measure its rate of inflation. The WPI measures the price of a representative basket of wholesale goods. In India, this basket is composed of three groups: Primary Articles (22.62% of total weight), Fuel and Power (13.15%) and Manufactured Products (64.23%).
Why India switched over to CPI from WPI?
A combination of core wholesale price index (WPI) and core CPI inflation would be an improvement over RBI currently targeting headline CPI inflation. This would help in balancing the interests of manufacturers and consumers. This measure of inflation also has a low standard deviation and a low mean inflation rate.
Is CPI calculated monthly in India?
In India, the Consumer Price Index (CPI) is calculated on a monthly basis by Ministry of Statistics and Programme Implementation (MOSPI). The following table provides All-India Sub-group/Group Weights of CPI (Rural), CPI(Urban) and CPI(Combined).
Why is CPI better than WPI?
Mainly WPI focus on prices of goods traded between business houses whereas CPI focuses on prices of goods purchased by consumers. As CPI provides more clarity about inflation and its economy on the overall economy hence CPI is widely used for calculating inflation as compared to WPI. So, monetary policy.
Is gas included in CPI?
Gasoline prices are so much more volatile than other CPI components that, even though gasoline makes up less than 6 percent of the CPI, it is often the main source of monthly price movements in the all items index.
Who prepares WPI?
In India WPI is also known as the headline inflation rate . In India, Office of Economic Advisor (OEA), Department of Industrial Policy and Promotion, Ministry of Commerce and Industry calculates the WPI.
Which CPI is used by RBI for inflation?
The Reserve Bank of India (RBI) has projected the Consumer Price Index (CPI) inflation at 5.3 percent for the financial year 2022, the same it had projected in the October meeting. Governor Shaktikanta Das announced the estimation while discussing the outcomes of the bi-monthly policy meet.
Who monitors inflation in India?
The amended RBI Act also provides for the inflation target to be set by the Government of India, in consultation with the Reserve Bank, once in every five years.
Which is not used in measurement of prices in India?
Since it encompasses the entire spectrum of economic activities including services, the scope and coverage of national income deflator is wider than any other measure. This data is released by the Central Statistical Organisation (CSO) but is not used as it comes quarterly and with a 2 month lag.