Why in News?
India’s retail inflation, based on the Consumer Price Index (CPI), increased to 1.33% in December 2025, up from 0.71% in November, as per data released by the National Statistical Office under the Ministry of Statistics and Programme Implementation.
Consumer Price Index:
Consumer Price Index (CPI) measures the average change over time in the prices paid by consumers for a representative “basket” of goods and services. It is the primary tool used to measure inflation and assess the cost of living
In India’s revised 2024 series, the basket includes 358 items classified under 12 divisions
- Food and Beverages (46%): Still the largest component, though its relative weight has slightly declined.
- Housing (10%): Now includes maintenance and water supply in its composite index.
- Services: Coverage has expanded to 50 items, including digital services like OTT subscriptions.
Types of CPI:
CPI (Combined):
- Covers both rural and urban populations
CPI – Industrial Workers (IW):
- Released by Labour Bureau
- Used to calculate Dearness Allowance (DA)
CPI – Agricultural Labourers (AL) / Rural Labourers (RL):
- Also released by Labour Bureau
CPI vs WPI
| Feature | CPI | WPI |
| Price Level | Retail (Consumer level) | Wholesale (Producer level) |
| Coverage | Goods + Services | Only Goods |
| Weightage | High weight to Food | High weight to Manufactured Goods |
| Used by | RBI for policy | Economic analysis |
