Consumer Price Index (CPI)

                                     Consumer Price Index


money Indian economy

CPI is calculated by measuring the price of various commodities at the customer level in the economy. In India, CPI-IW, CPI-AL,CPI-RL and CPI-UNME

These four different types of different people are counted differently for the group.
CPI-C (Consumer  Price Index-combined) is calculated for the whole of India. The index will be published by the Central Statistical Organization(CSO).

Since 18th February 2011, rural India was being measured as CPI-Rural and CPI-Urban for urban areas began to be measured. Average calculation of these two indicators is expressed as an CPI-C. For 2010 was considered to be the base year. In addition to the 225 commodities and services for the rural area and the cost of 250 items and services for urban areas,

Since February 2015, 2012 is considered to take into account the new Base Year.
448 goods and services for rural areas And for urban areas 460 items and services were measured. According to states, the number of goods and services is different.
The following types of goods and services are considered when calculating CPI.

1) Food and Beverage - Food, meat, milk, oil, etc.

2) Pan and Tobacco - Tobacco and Intoxicants

3) Clothes and footwear

4) Home - (This component is considered for urban areas only. Not applicable for rural areas.)

5) Fuel and light

6) Others - In these households and services are considered. For example health,
transport, entertainment, education etc.


The above 6 factors are given as the weighted average of measuring CPI
 
Sr.
       Factor
    Rural
  Urban
Combined
1
Food and Beverage
     54.18%
  36.29%
  45.86%
2
Pan and Tobacco
     3.26%
  1.36%
  2.38%
3
Clothes and footwear
    7.36%
  5.57%
  6.53%
4
Home
     ------
  21.67%
  10.07%
5
Fuel and light
    7.94%
  5.58%
  6.84%
6
Other
    27.26%
  29.53%
 28.32%

Total
    100%
  100%
  100%

As per the new method, CSO used the survey done by the NSSO (Mix Recall Period) method.

 Since 2014, CFPI (Consumer Food Price Index ) are published independently and based on prices of food items only.

Headline Inflation:
Headline inflation is said to be based on the Consumer Price Index (CPI) for all goods and services (448 for rural and 460 for urban and considering services and services).

Core Inflation:
Core inflation is the measurement rate of commodities and services leaving food items and fuel components


RBI policy

WPI Headline Inflation was considered before 2014. After deciding on the strategy for the currency.Consumer Headline Inflation is considered in the context of Urjit Patel Committee's recommendation since April 2014.

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