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Retail Inflation Growth at 6.09%

  • 14 Jul 2020
  • 4 min read

Why in News

Recently, the National Statistical Office (NSO) released the retail inflation data, which rose to 6.09% in the month of June, 2020.

  • Retail inflation is measured by the Consumer Price Index (CPI).

Key Points

  • The retail inflation growth was mainly due to a rise in pulses and products prices that saw a 16.68% on-year rise in June.
    • Apart from pulses and products segment, the meat and fish segment saw a rise of 16.22%, while that of oils and fats rose 12.27% and spices prices gained 11.74%.
  • The retail inflation has grown beyond the Reserve Bank of India’s (RBI) upper margin of 6%.
    • The Central government has mandated the RBI to keep inflation within the range of 4±2%.
    • This inflation range (4% within a band of +/- 2%) was recommended by the committee headed by Urjit Patel in 2014.
  • The NSO also released the Consumer Food Price Index (CFPI) data which measures the inflation in the food basket.
    • The CFPI stood at 7.87% in the month of June. The CFPI for May was revised to 9.20%.
    • The reduction in CFPI is because of ease in supply related issues post lockdown.
  • The government has not released the retail inflation data for April and May.
    • The price collection of Consumer Price Index (CPI) through personal visits of price collectors was suspended due to the announcement of nation-wide lockdown to contain spread of Covid-19 pandemic.


  • Inflation refers to the rise in the prices of most goods and services of daily or common use, such as food, clothing, housing, recreation, transport, consumer staples, etc.
  • Inflation measures the average price change in a basket of commodities and services over time.
  • Inflation is indicative of the decrease in the purchasing power of a unit of a country’s currency. This could ultimately lead to a deceleration in economic growth.
  • However, a moderate level of inflation is required in the economy to ensure that production is promoted.
  • In India, the NSO under the Ministry of Statistics and Programme Implementation measures inflation.
  • 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.

Consumer Price Index

  • It measures price changes from the perspective of a retail buyer.
  • 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.
  • The CPI has several sub-groups including food and beverages, fuel and light, housing and clothing, bedding and footwear.
  • Four types of CPI are as follows:
    • CPI for Industrial Workers (IW).
    • CPI for Agricultural Labourer (AL).
    • CPI for Rural Labourer (RL).
    • CPI (Rural/Urban/Combined).
    • Of these, the first three are compiled by the Labour Bureau in the Ministry of Labour and Employment. Fourth is compiled by the National Statistical Office (NSO) in the Ministry of Statistics and Programme Implementation.
  • Base Year for CPI is 2012.
  • The Monetary Policy Committee (MPC) uses CPI data to control inflation.

Source: IE

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