Average Inflation Rate in India (Last 10 Years) On the other hand, inflation data on the wholesale Price Index (WPI), which calculates the overall prices of goods before selling at retail prices, is at 4.12% in June 2023, from 3.48% in May this year. India’s retail inflation, which is measured by the consumer price index (CPI), rose to a three-month high of 4.81% in June 2023, from 4.25% in May this year, according to the latest data from the Ministry Of Statistics and Programme Implementation. Average Inflation Rate in India (Last Year) The WPI-based wholesale inflation considers the change in prices at which consumers buy goods at a wholesale price or in bulk from factory, mandis, etc. The WPI, which refers to the Wholesale Price Index, analyzes the inflation of only goods across 697 commodities. The data is collected separately by the Ministry of Statistics and Program Implementation and the Ministry of Labour. The CPI-based retail inflation considers the change in prices at which the consumers buy goods. The CPI, which refers to the Consumer Price Index, analyzes the retail inflation of goods and services in the economy across 260 commodities. The study helps the government and the Reserve Bank of India (RBI) to understand the price change in the market and thus keep a tab on inflation. These two measure inflation on a monthly basis taking into account different approaches to calculate the change in prices of goods and services. There are two indices that are used to measure inflation in India - the consumer price index (CPI) and the wholesale price index (WPI).
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How to Calculate Inflation Rate In India? However, high inflation indicates that an economy is facing serious troubles whereas, low inflation, a.k.a. Economists suggest that achieving inflation that’s moderate enough to drive consumption will create a baseline of growth in the economy. Therefore, any factor that causes prices of goods and services to rise in the market and create instability in consumption leads to inflation. You may be either forced to remove an item from your cart or buy the product that has the inflated price by paying extra which may affect your monthly-set budget. One way of understanding inflation is, for instance, you bought a list of household essentials last month at an expense of INR 1,000, but this month the price of a certain food item in the same list has risen and that has led to an increase in the cost by let’s say INR 1,100. In other words, inflation is a measure that causes the prices of both goods and services to rise over time and buyers will feel the pinch as it affects their personal finance, particularly spending and buying habits. Inflation is crucial to determine one’s purchasing power.
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