Inflation: WPI vs CPI Trends and Targeting
Inflation in India is primarily monitored using two indices: the Wholesale Price Index (WPI) and the Consumer Price Index (CPI). Both serve distinct roles in policymaking and economic analysis, impacting monetary strategy and cost-of-living adjustments.
Nodal Authority / Institution
- CPI: Compiled by National Statistical Office (NSO), Ministry of Statistics and Programme Implementation.
- WPI: Compiled by Office of Economic Adviser, Ministry of Commerce and Industry.
- RBI utilizes primarily CPI for monetary policy decisions and inflation targeting.
Impact of Inflation on Economy
- High inflation erodes consumers' purchasing power, especially affecting lower and middle-income groups who spend more on essentials.
- Businesses face squeezed profit margins as ....
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