According to data provided by the National Statistical Office (NSO) on Monday, India’s annual Consumer Price Index (CPI) retail inflation rate in February 2022 was 6.07 percent.
What is India’s current retail inflation rate?
The Reserve Bank of India (RBI) is attempting to calm fears about rising prices, but Indian households may end up bearing the brunt of the burden.
India’s retail inflation increased to 6.01 percent in January, just above the top limit of the Reserve Bank of India’s tolerance zone, due to rising costs of food and manufactured goods, according to data released on Feb. 14. From a revised 5.66 percent in December to 4.06 percent in January 2021, the consumer price index (CPI) reached its highest level in seven months.
What is India’s method for calculating retail inflation?
In India, price indices are used to calculate inflation and deflation by determining changes in commodity and service rates. In India, inflation is measured using the Wholesale Price Index (WPI) and the Consumer Price Index (CPI) (CPI).
What is the difference between retail and wholesale inflation?
In November, wholesale inflation, as assessed by the wholesale price index, reached 14.2 percent, the highest level since 1991. In contrast, retail inflation, as assessed by the consumer price index, is at a more manageable 4.9 percent.
Not only do the two indices imply vastly different amounts of inflation, but their paths have also diverged. While WPI inflation has been on the increase since the middle of the year, retail inflation has been stable.
What is the formula for retail inflation?
Current CPI – Previous CPI/ Previous CPI x 100 is the formula. 550 – 400/ 400 x 10 is the result of using the formula. That’s 150/400 multiplied by 100. As a result, the rate of inflation is 37.5 percent.
So, what exactly is retail inflation?
In January of this year, retail inflation, which has been rising since September of last year, reached 6.01 percent.
The Consumer Price Index (CPI) tracks retail inflation, which analyzes price increases from the perspective of a retail buyer.
Wholesale inflation is measured at the producer level and is tracked by the Wholesale Price Index (WPI).
WHOLESALE INFLATION
Meanwhile, according to government data released on Monday, India’s annual wholesale price-based inflation increased to 13.11 percent in February from 12.96 percent the previous month.
EXPORTS GROW
Meanwhile, according to a PTI report, India’s exports increased by 25.1 percent to USD 34.57 billion in February, owing to strong development in industries such as engineering, petroleum, and chemicals, even as the trade deficit worsened to USD 20.88 billion.
What exactly are CPI and WPI?
- WPI measures inflation at the production level, while CPI measures price fluctuations at the consumer level.
- Manufacturing goods receive more weight in the WPI, whereas food items have more weight in the CPI.
What is Inflation?
- Inflation is defined as an increase in the price of most everyday or common goods and services, such as food, clothing, housing, recreation, transportation, consumer staples, and so on.
- Inflation is defined as the average change in the price of a basket of goods and services over time.
- Inflation is defined as a drop in the purchasing power of a country’s currency unit.
- However, to ensure that output is supported, the economy requires a moderate amount of inflation.
- In India, inflation is largely monitored by two primary indices: the wholesale pricing index (WPI) and the retail price index (CPI), which reflect wholesale and retail price fluctuations, respectively.
What are the key reasons for India’s inflation?
When the government cannot earn enough revenue to cover its expenses, it must rely on deficit financing. Massive amounts of deficit finance were used during the sixth and seventh plans. In the sixth Plan, it was Rs. 15,684 crores, while in the seventh Plan, it was Rs. 36,000 crores.
Increase in government expenditure:
India’s government spending has been rapidly increasing in recent years. What’s more alarming is that the proportion of non-development spending has risen fast, now accounting for nearly 40% of overall government spending. Non-development spending does not produce tangible commodities; instead, it increases purchasing power, resulting in inflation.
Not only do the elements described above on the Demand side produce inflation, but they also add gasoline to the fire of inflation on the Supply side.
Inadequate agricultural and industrial growth:
Our country’s agricultural and industrial expansion has fallen well short of our expectations. Food grain output has increased at a rate of 3.2 percent per year during the last four decades.
Droughts, on the other hand, have caused crop failure in some years. During years of food grain scarcity, not only did the prices of food articles rise, but so did the overall price level.
What’s the difference between CPI and inflation?
- The Consumer Price Index (CPI) is a measure of the average change in prices paid for a basket of goods and services by consumers in urban households across time.
- The CPI is a widely used economic indicator in the United States for detecting periods of inflation (or deflation).
- While the CPI is the most extensively followed and utilized measure of inflation in the United States, many economists disagree over how inflation should be calculated.
- Look to the Personal Consumption Expenditures (PCE) Price Index, or use the Producer Price Index (PPI) and the GDP deflator in combination with the most recently released CPI measures for a more accurate and comprehensive estimate of inflation rates in the United States.
Who determines India’s inflation rate?
CPI stands for Consumer Price Index (CpI) A number of consumer pricing indexes are published by two government departments, the Ministry of Statistics and Programme Implementation (MOSPI) and the Ministry of Labour and Employment (Table 2). Each index has its own set of weights, and the base period utilized by each measure is different.
CPI or WPI: which is better?
MUMBAI: Reserve Bank Governor D Subbarao stated on Tuesday that the consumer price index (CPI) captures market dynamics better than the wholesale pricing index (WPI), resulting in a more realistic inflation estimate.