In India, inflation has been a source of concern over the past few years due to the increase in the prices of essential commodities affecting the lives of common man. Measuring this inflation is also a challenge because of its widespread impact on several goods, commodities and services.
Two major measures for inflation, which are widely used, are Wholesale Price Index (WPI) and Consumer Price Index (CPI). WPI measures the increase in the prices of a fixed basket of goods prevailing in the wholesale market while CPI measures the increase in the prices of essential commodities purchased by an average consumer prevailing in the retail market. Measured weekly, WPI is the primary inflation measure in India.
The following tables provide a glimpse into the factors used to measure inflation in India based on data obtained from December 2009 monthly report released by Department of Economic Affairs. To get a better understanding of these indices, refer to the following PPT on inflation.
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Read an article on the Inflation Survival Guide in India
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