About CPI

• Consumer Price Index is an index which measures the weighted average of prices of a basket of consumer goods and services such as transportation, food and medical care. 
• It is calculated by measuring price changes for each item in the predetermined basket of goods and services and averaging them.

How does the Consumer Price Index help?

• The Reserve Bank of India and other statistical agencies study CPI so as to understand the price change of various commodities and keep a tab on inflation. 
• CPI is also a helpful pointer in understanding the real value of wages, salaries and pensions, the purchasing power of a country’s currency, and regulating prices.

Who maintains the Consumer Price Index in India?

• In India, different types of consumer price index numbers are released by the government which includes:
  • CPI for Industrial Workers (IW)
  • CPI for Agricultural Labourers (AL)
  • CPI for Rural Labourers (RL) 
• The Ministry of Labour & Employment collects the data for CPI (IW), CPI (AL) and CPI (RL) and compiles it.
• In addition to these, the National Statistical Office (NSO), Ministry of Statistics and Programme Implementation is releasing 
  • CPI for Rural
  • CPI for Urban and
  • CPI Combined (computed by combining CPI Rural and CPI Urban)

What is the base year of an Index?

• The CPI is calculated with reference to a base year, which is used as a benchmark. The price change pertains to that year.
• In India, the base year of the current series of CPI (IW) is 2016. The base year of CPI (AL) and CPI (RL) is 1986-87.
• For CPI Rural, Urban and Combined, the base year is 2011-12. 

Why in News?

• The All-India Consumer Price Index Number for Agricultural Labourers and Rural Labourers (Base: 1986-87=100) for the month of September, 2023 increased by 2 points and 3 points respectively to stand at 1226 and 1237 points respectively. 

https://pib.gov.in/PressReleasePage.aspx?PRID=1969533