Retail Inflation
- Measures the change in retail prices of goods and services purchased by households for daily consumption, based on a fixed basket of goods and services.
- Assessed using Consumer Price Index (CPI).
- CPI measures changes in the prices of goods and services that households acquire for consumption.
- Facts To Know
- It is used as a tool by governments and central banks for inflation targeting and for monitoring price stability.
- It is used for indexing dearness allowance to employees for an increase in prices.
- The CPI is released by the National Statistical Office under the Ministry of Statistics.
- The CPI base year is to be changed to 2024 from 2012.
- The composition of the inflation basket has changed: the weight of food and beverages has been reduced from 54% to 37%.
- The United Nations Statistical Division’s (UNSD) Classification of Individual Consumption According to Purpose (COICOP 2018) will be adopted into CPI for better global comparison.
- The CPI basket now includes 358 weighted items, up from 299 earlier.
- New inclusions include rural house rent, OTT services, international air travel, and newer energy sources such as CNG and PNG.
- The number of service items has risen to 50.
- The new CPI uses the Jevons index, a chain-price method that links monthly price changes.
Source: The Hindu