India's benchmark inflation rate, measured by the Consumer Price Index (CPI), settled at 5.59% year-on-year in December 2021, as data released by the Ministry of Statistics and Program Implementation show.
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The CPI remains within the RBI tolerance threshold for 6 consecutive months.
The Monetary Policy Committee officially requires interest rate setting agencies to keep inflation within the 6% range and the medium-term target at 4%.
CPI-based inflation Retail prices for goods and services: When we talk about inflation, we often refer to inflation based on the consumer price index (CPI).
CPI tracks changes in the retail price of goods and services that households buy for daily consumption.
When prices fall, it is called deflation (negative inflation).
The Central Bank (RBI) pays close attention to this number in its role in maintaining price stability in the economy.
The CPI also helps you understand salaries, wages, the actual value of your pension, the purchasing power of your home currency, the rate of regulation, and more.
CPI formula: (basket price for the current period / basket price for the base period) x 100
