Retail Inflation 

According to the National Statistical Office (NSO), the retail inflation rate in India surged to a 14-month high of 6.21% in October, driven by a notable increase in the prices of essential food items.

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About Retail Inflation

• Retail inflation refers to the rate at which the general price level of goods and services bought by households increases over a specific period.
• In India, retail inflation is measured by the Consumer Price Index (CPI), which tracks the changes in the prices of a basket of goods and services typically consumed by urban and rural households.
• An imbalance in supply and demand, disruption in supplies, or expectations of inflation can cause inflation.

 

Consumer Price Index (CPI)

• The Consumer Price Index (CPI) in India is a measure of average price changes for goods and services. 
• The National Statistical Office (NSO) calculates it separately for urban and rural areas and combines them to get the overall CPI. 
• This index is important for understanding inflation, informing policy decisions, and adjusting wages and pensions.

 

Steps Taken by the RBI

• Monetary Policy Adjustments: The RBI may consider tightening monetary policy by raising the repo rate to curb inflationary pressures.
• Supply Chain Measures: The government intervenes to streamline supply chains and reduce disruptions.