The government on Friday launched a new consumer price index (CPI) aimed at better reflecting actual changes in cost of living that would aid macroeconomic managers to prescribe policies based on more appropriate data.
According to the latest data, CPI-based inflation for January stood at 6%, but in the backdrop of high inflation. Inflation, as measured by the WPI, stood at 8.23% in January.
Experts caution the new index only sets the ground for future perspectives and the measurement should not be construed as a decline in the rate and it will take a while for the new system to take effect.
The index incorporates the price of several key services including telephone bills, education and recreation to mirror current day lifestyles. Central banks across the world rely mostly on CPI data to decide monetary policy, unlike the Reserve Bank of India (RBI), which uses the Wholesale Price Index (WPI) as the key inflation index.
While CPI, according to new series, has increased to 106 in January this year from a base of 100 in 2010, last year’s
inflation has not been mentioned making a yearly comparison difficult.
While CPI, according to new series, has increased to 106 in January this year from a base of 100 in 2010, last year’s
inflation has not been mentioned making a yearly comparison difficult.