Retail Inflation Trends in India
- Context: Country’s retail inflation accelerated to 3.4% in the last month, up from 3.21% recorded in February this year.
- According to data released by the Ministry of Statistics and Programme Implementation, inflation in rural areas edged higher to 3.63%, while in urban regions it rose to 3.11%.
- The food inflation rate, based on the All India Consumer Food Price Index, stood at 3.87% in March, up from 3.47% in the preceding month.
- The top items showing high inflation includes Gold and Silver jewellery, Coconut, Tomato and Cauliflower.
- In contrast, items with lowest inflation include Onion, Potato, Garlic, Arhar or Tur and Peas or Chickpeas.
About Retail Inflation
- Retail inflation, or Consumer Price Index inflation, measures changes in the prices of goods and services that households regularly consume.
- It reflects the day-to-day cost burden on consumers.
CPI Indicates
- Tracks how expensive it is for households to maintain their standard of living.
- Shows the ability of consumers to buy goods and services.
- Reflects the relative cost of different goods and services.
- Indicates the real value of the Indian rupee in terms of purchasing capacity.
Method of Calculation
- CPI is expressed as a percentage index.
- It compares current prices with prices in a reference (base) year.
- CPI base year is revised to 2024, updating the consumption basket and weights for both rural and urban households.
Compiling Authority
- The National Statistical Office (NSO) under the Ministry of Statistics and Programme Implementation (MoSPI) compiles CPI data.
- It releases monthly CPI figures for: Rural, Urban, Combined sectors, State-wise data
Uses of CPI
- Acts as a key indicator of inflation in the economy.
- Helps the central bank and government in: Inflation targeting, Maintaining price stability
- Used as a deflator in national accounts to adjust nominal values.
- Assists in evaluating: Real wages, salaries, and pensions, Purchasing power of money
- Guides policy decisions related to interest rates and economic regulation.
Current Facts
- Part V, Article 81– Composition of the House of the People
- Part V, Article 82- Readjustment after each census
