Question

Retail Inflation in India is measured by which of the following indices?
1. Wholesale Price Index
2. Consumer Price Index
3. Gross Domestic Product
4. Commodity price index
5. Cost of living index

Answer 1

Correct Answer - Option 2 : Consumer Price Index

The correct answer is Consumer Price Index.

• Retail Inflation:
  • Measured by the Consumer Price Index (CPI).
• RBI primarily factors in retail inflation while making its bi-monthly monetary policy.

• Consumer Price Index
  • It measures price changes from the perspective of a retail buyer. It is released by the National Statistical Office (NSO).
  • The CPI calculates the difference in the price of commodities and services such as food, medical care, education, electronics etc, which Indian consumers buy for use.
  • The CPI has several sub-groups including food and beverages, fuel and light, housing and clothing, bedding and footwear.
  • At present, India has five consumer price indexes (CPIs), three of which are working-class specific. These are:
    • CPI for Industrial Workers (IW).
    • CPI for Agricultural Labourer (AL).
    • CPI for Rural Labourer (RL).
  • These three indexes are compiled by the Labour Bureau in the Ministry of Labour and Employment.