Consumer Price Index

  • IASbaba
  • December 22, 2022
  • 0
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In News: The All-India Consumer Price Index Number for Agricultural Labourers and Rural Labourers for the month of November, 2022 increased by 8 points each to stand at 1167 (One thousand one hundred and sixty seven) and 1178 (One thousand one hundred and seventy eight) points respectively.

  • Major rise came from food group due to increase in prices of rice, wheat-atta, jowar, bajra, pulses, meat goat, mustard-oil, milk, ghee, onion, mixed spices, tea, etc.
  • Tamil Nadu topped whereas Himachal Pradesh stood at the bottom.
  • Maximum increaseBihar
  • Maximum decrease – Assam
  • Point to point rate of inflation based on the CPI-AL and CPI-RL stood at 6.87% & 6.99% in November, 2022 compared to 7.22% & 7.34% respectively in October ’22.

About CPI:

  • It is a comprehensive measure Consumer Price Index or CPI as it is commonly called is an index measuring retail inflation in the economy by collecting the change in prices of most common goods and services used by consumers.
  • Called market basket, CPI is calculated for a fixed list of items including food, housing, apparel, transportation, electronics, medical care, education, etc.
  • Remember, CPI is different from WPI, or Wholesale Price Index, which measures inflation at the wholesale level.
  • In India, there are four CPI numbers:
  • CPI for Industrial Workers (IW)
  • CPI for Agricultural Labourers (AL)
  • CPI for Rural Labourers (RL) and
  • CPI for Urban Non-Manual Employees (UNME).
  • While the Ministry of Statistics and Program Implementation collects CPI (UNME) data and compiles it, the remaining three are collected by the Labour Bureau in the Ministry of Labour.


  • To calculate the inflation levels CPI’s annual percentage change is also used to assess inflation.
  • To compute the cost of living
  • the purchasing power of a country’s currency
  • Understanding the real value of wages, salaries and pensions,
  • Price regulation
  • Provides insights to consumer spending capacity

The calculation

  • The CPI is calculated with reference to a base year, which is used as a benchmark.
  • The price change pertains to that year.
  • CPI = (Cost of basket divided by Cost of basket in the base year) multiplied by 100
  • Base years
  • CPI(IW) = 1982
  • CPI(AL) = 1986-87
  • CPI(RL) = 1984-85

MUST READ Inflation

Source: PIB

Previous Year Questions

Q1.) Which of the following brings out the ‘Consumer Price Index Number for Industrial Workers?

  1. The Reserve Bank of India
  2. The Department of Economic Affairs
  3. The Labour Bureau
  4. The Department of Personnel and Training


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