What is CPI Inflation?

 The CPI infl ation is nothing but the rate of infl ation that consumers face.

 It is diff erent from the major infl ation indicator — the wholesale price index-based infl ation rate.

 According to the Ministry of Statistics and Programme Implementation (MoSPI), which releases the

data, the consumer price index measures “changes over time in general level of prices of a basket

of selected goods and services that households acquire for the purpose of consumption”.

 At an all-India level, the current CPI basket comprises 299 items.

 Apart from an aggregate index, consumer price indices are constructed for both rural and urban

consumers as well.

 The “base year” for the current series of indices is 2012.

 The CPI has six main

components, each with

diff ering weights and many

more sub-components within

them. The main components

as follows :

 This means that a spike in

prices of food articles like

cereals, vegetables, milk and

pulses tends to have the

biggest impact in raising

consumer infl ation. And the

reason why food articles have

been given such a high weightage is that

most Indian consumers tend to spend

a considerable portion of their income

towards meeting their food demand.

 The infl ation rate varied across

diff erent regions of the country, with Odisha recording the highest infl ation rate at 8.7% and

Delhi experiencing the lowest at 2.9%.

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