Published: 20th Jul, 2020
According to the latest data released by the Ministry of Statistics & Programme Implementation (MoSPI), India’s retail inflation grew 6.09 percent in June.
Context
According to the latest data released by the Ministry of Statistics & Programme Implementation (MoSPI), India’s retail inflation grew 6.09 percent in June.
About
- India’s retail inflation is measured by the Consumer Price Index (CPI). It grew at 6.09% in June.
- The government had not released the headline retail inflation data in April and May.
- However, in April, it had revised the CPI data for March to 5.84 percent from 5.91 percent.
- The retail inflation has grown beyond the Reserve Bank of India’s (RBI) upper margin of 6 percent.
- The government has mandated the Indian central bank to keep inflation within the range of 4 percent with a margin of 2 percent on either side.
- The Consumer Food Price Index (CFPI) or the inflation in the food basket eased to 7.87 percent in June as the supply related issues because of the nationwide lockdown eased.
- The CFPI for May was revised to 9.20 percent.
- The retail inflation growth was due to:
- A rise in pulses and productsprices that saw a 68 percent on-year rise in June.
- The meat and fishsegment saw a rise of 22 percent.
- Oils and fatsrose 27 percent and spices prices gained 11.74 percent.
Inflation
- It is the rate at which the general level of prices for goods and services is rising and, consequently, the purchasing power of currency is falling.
- Inflation is classified into three types: Demand-Pull inflation, Cost-Push inflation, and Built-In inflation.
- The most commonly used inflation indexes are the Consumer Price Index (CPI) and the Wholesale Price Index (WPI).
- In India, the NSO under the Ministry of Statistics and Programme Implementation (MOSPI) measures inflation.
Consumer Price Index (CPI)
- It is an index measuring retail inflation in the economy by collecting the change in prices of most common goods and services used by consumers.
- The CPI is used to calculate the inflation levels in an economy.
- In India, there are four consumer price index numbers, which are calculated, and these are as follows:
- CPI for Industrial Workers (IW)
- CPI for Agricultural Labourers (AL)
- CPI for Rural Labourers (RL) and
- CPI for Urban Non-Manual Employees (UNME).
- While the Ministry of Statistics and Program Implementation collects CPI (UNME) data and compiles it, the remaining three are collected by the Labour Bureau in the Ministry of Labour.
- CPI = (Cost of basket divided by Cost of basket in the base year) multiplied by 100.
- The base year for CPI is 2012.
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