CONSUMER
PRICE INDEX - REPORTS AND INDICES
News:
Prohibitive price gains:
On the Consumer Food Price Index
What's
in the news?
●
Inflation measured by the Consumer Price
Index expectedly quickened to a four-month high in December, with the measure
of gains in food prices accelerating at a relatively faster pace as inflation
in cereals and pulses stayed stubbornly sticky.
Key
takeaways:
●
While headline
retail inflation ticked up by 14 basis points from November’s level to
5.69%, price gains measured by the Consumer Food Price Index accelerated by 83
basis points from the preceding month’s reading to 9.53% in December.
●
The upsurge
in food prices was largely driven by cereals — the biggest constituent of
the ‘food and beverages’ group — that logged 9.93% inflation.
●
Though that pace was marginally slower
than the 10.3% posted in November, the key sub-group that includes the staples
of rice, wheat and coarser cereals continued to register a month-on-month rate
of inflation that offered little comfort to households.
CPI:
●
It measures price changes from the
perspective of the retail buyer.
●
The National
Statistical Office publishes it.
●
The CPI calculates the difference in the
prices of commodities and services purchased by Indian consumers for use, such
as food, medical care, education, electronics etc.
●
Food and beverages, fuel and light,
bedding and footwear, housing, and clothing are all sub-groups of the CPI.
Types:
CPIs are classified into
four types:
●
CPI Industrial Workers - Labour Bureau
●
CPI Agricultural Labourer - Labour Bureau
●
CPI Rural Labourer - Labour Bureau
●
CPI (Urban/Rural/Combined) - NSO
The
first three are compiled by the Labour Bureau, which is part of the Ministry of
Labour and Employment. The NSO at the Ministry of Statistics and Programme
Implementation compiles the fourth.
Base
year:
●
CPI's base year is 2012.
●
The Ministry of Labour and Employment
recently released the new series of Consumer Price Index for Industrial Workers
(CPI-IW) with 2016 as the base year.
Usage:
●
CPI data are used by the Monetary Policy Committee (MPC) to control inflation.
The Reserve Bank of India (RBI) adopted the CPI as its key measure of inflation
in April 2014.
What
is the difference between WPI and CPI?
●
WPI measures inflation at the producer
level, whereas CPI measures price changes at the consumer level.
●
WPI does not account for changes in
service pricing, but CPI does.
●
In the WPI, manufactured goods are given
more weightage, whereas food items are given more weightage in the CPI.