Consumer Price Index - CPI

What is the Consumer Price Index - CPI

There are three main tools used to measure inflation in India, today we will discuss about Consumer Price Index (CPI). Consumer Price Index that measures the average value of goods and services purchased by domestic consumers. What we spend in everyday life such as education, clothing, rice, tuition fees etc. The average of this entire expenditure is shown through the Consumer Price Index-CPI. It includes eight types of expenses. These are education, communication, transportation, entertainment, clothing, food & beverages, housing and medical care.


How to measures inflation in India ?

There are three main tools to measures inflation in India.

(i) WPI ( Wholesale Price Index)

(ii) CPI (Consumer Price Index)

(iii) GDP Deflator


This formula is used to calculate the Consumer Price Index for a single or individual item is as follows:

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In India many indices are used to measures inflation. All these indices are used to facilitate government, expenses, importers, producers and consumers. Basically WPI and CPI indices are used for price movements in India and identifying periods of inflation or deflation.


In January 2015, its base year was changed from 2010 to 2012. CPI statistics and data are compiled by National Sample Survey Organisation- NSSO and put on the web portal. Inflation figures based on Consumer Price Index in India are released monthly basis by the Central Statistics Organisation. The data related to price and value of goods and services for this index is collected by the National Sample Survey Organisation NSSO.

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