Concept of Consumer Price Index (CPI)
Why in news
- Growth in the Consumer Price Index quickened in September from 3.28% in the previous month.
Consumer Price Index (CPI)
- It is also called as retail inflation because prices are quoted from retailers.
- CPI captures variations in prices levels at the consumer level.
- It is based on 260 commodities, and also includes certain services.
- Ministry of Statistics and Programme Implementation (MoSPI) and Ministry of Labour and Employment (MOLE) are engaged in the construction of different CPI for different groups/sectors.
- Following are the various CPIs
- CPI for Industrial Workers (IW).
- CPI for Agricultural Labourer (AL).
- CPI for Rural Labourer (RL).
- CPI (Rural/Urban/Combined).
- The first three are compiled by the Labour Bureau in the Ministry of Labour and Employment.
- Fourth is compiled by the Central Statistical Organisation (CSO) in the Ministry of Statistics and Programme Implementation.
- Base Year for CPI is 2012.
Consumer Food Price Index (CFPI)
- It is a measure of change in retail prices of food items consumed by the population.
- It was launched by CSO in 2014.
- The index gives food price level changes for rural, urban and all India bases.
- The base year used in CFPI is 2012 as in the case of CPI.
- CFPI is based on retail price quotations as in the case of CPI.
Composition of CFPI
- The Methodology for the calculation of CFPI is similar to that of CPI.
- In CPI, food and beverage group constitutes 45.86% of weight. Out of this, beverages and some of the eatable items are excluded to derive the CFPI basket of commodities.
- Weight of the CFPI commodities is 39.05% of the entire CPI basket.
- CSO brings CFPIs for the three groups and hence there are three CFPIs:
- CFPI -Rural
- CFPI –Urban
- CFPI – Combined
- Price quotations and data are collected from selected towns by the Field Operations Division of NSSO and from selected villages by the Department of Posts.
- Data are received through web portals being maintained by the National Informatics Centre.