The inflation has reached 17-month high due to the costlier food items. The common man has faced a major setback due to inflation. The government released data on Tuesday, according to which the Consumer Price Index (CPI) based retail inflation has risen to 6.95 in March. The food items have faced inflation from 5.85% to 7.68%. The IIP also increased from -3.2% to 1.7% in February.
The past three month’s record of inflation was 6.01% in January, 6.07% in February and 6.95% in March 2022. This is the third consecutive month that the inflation rate has crossed the RBI limits. The RBI’s upper limit is 6%. According to the last year’s data, the Retail inflation rate was 5.52% in March 2021.
It is to be mentioned that during the recent Reserve Bank’s first monetary policy meeting of this financial year, the inflation rates are raised to 6.3% in the first quarter, 5% in the second, 5.4% in the third and 5.1% in the fourth.
Many countries around the world use WPI (Wholesale Price Index) as their basis for measuring inflation. But it is not applicable in India. In India, CPI is also considered while checking inflation. Retail inflation is considered the main standard for setting monetary and credit-related policy by the Reserve Bank of India.
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WPI and CPI influence each other in the nature of the economy. In this way, the WPI will increase, so the CPI will also increase. There are around 299 items, based on whose prices the rate of retail inflation is decided. It includes crude oil, commodity prices, manufacturing cost etc.