Competitive Exams: Current Affairs 2011: New Consumer Price Index

New Consumer Price Index

  • India has adopted the new Consumer Price Index (CPI) that will reflect the actual movement of prices at the micro-level.

  • The Central Statistics Office (CSO), Ministry of Statistics and Program Implementation, has introduced the new series of consumer price indices for all-India, and States and union territories separately for rural, urban and combined for the purpose of intra temporal price comparison with effect from January, 2011, with 2010 as the base year.

  • India is one of the few countries in the world using the WPI as benchmark. Experts say the new CPI is likely to help policymakers like the Reserve Bank of India in better framing of decisions.

  • The initial data showed that retail inflation stood at 6 per cent in January this year. However, inflation, as measured by the Wholesale Price Index which remains the top benchmark stood at 8.23 per cent in January.

  • The New CPI index will be based on state stats. Each state will have two * consumer price indices, one for rural and another for urban areas. These CPI rural and urban will be added up to arrive at urban and rural retail indices at the national level. These indices will then be combined based on their relative weights to get a composite retail index.


  • Help assess the origin and impact of price shocks, allowing faster and effective intervention. Provide a good retail measure of inflation problems with current CPIs numerous: Too narrowly targeted
  • Poor quality: Irrelevant for macro policy formulation.

Courtesy: The Hindu and Times of India