Consumer Price Index
- India’s retail inflation reduced to 5.3% in August from 5.6% in July.
- Food price inflation has got reduced to to 3.11% from nearly 4% in July.
- This marks the second month of marginal moderation in the Consumer Price Index (CPI), keeping retail inflation below the central bank’s upper tolerance threshold of 6% after hitting 6.3% in May and June this year.
What is Consumer Price Index?
- Consumer Price Index or CPI is the measure of changes in the price level of a basket of consumer goods and services bought by households.
- It measures price changes from the perspective of a retail buyer.
- It measures changes over time in the level of retail prices of selected goods and services on which consumers of a defined group spend their incomes.
- CPI is a numerical estimation calculated using the rates of a sample of representative objects the prices of which are gathered periodically.
- Depending upon the socio-economic differentiations among consumers, India has four differing sets of CPI with some differentials in the basket of commodities allotted to them.