As money generally loses its value over time, it is important for people to invest the money. Investing ensures the economic growth of a country. Who measures Inflation in India? Inflation is measured by a central government authority, which is in charge of adopting measures to ensure the smooth running of the economy. In India, the Ministry of Statistics and Programme Implementation measures inflation. How is Inflation measured? In India, inflation is primarily measured by two main indices — WPI (Wholesale Price Index) and CPI (Consumer Price Index), which measure wholesale and retail-level price changes, respectively. The CPI calculates the difference in the price of commodities and services such as food, medical care, education, electronics etc, which Indian consumers buy for use. On the other hand, the goods or services sold by businesses to smaller businesses for selling further is captured by the WPI. In India, both WPI (Wholesale Price Index) and CPI (Consumer Price Index) are used to measure inflation. What are the main causes of Inflation?
The main causes of inflation in India have been subject to considerable debates and discussions. These are some of the chief reasons for the increase in prices: High demand and low production or supply of multiple commodities create a demand- supply gap, which leads to a hike in prices. Excess circulation of money leads to inflation as money loses its purchasing power. Increase in the prices of goods and services is also a factor to consider as the involved labour also expects and demands more costs/wages to maintain their cost of living. This spirals to further increase in the prices of goods.
- Winter '17
- Economics, Business, What Is Inflation