MEASURING INFLATOIN

PRESENTED BY-: MANISH KUMAR ROLL NO 44

MEASURING INFLATON
Inflation is measured by calculating the percentage rate of change of a price index which is called the inflation rate. Consumer price index-: (PI for a certain year- PI for a comparative year)x100 (PI for a comparative year) WHOLESALE PRICE INDEX

TECHNIQUES
Consumer price index -: (PI for a certain year- PI for a comparative year) (PI for a comparative year) WHOLESALE PRICE INDEX

CONSUMER PRICE INDEX

CPI is a measure estimating the average price of consumer goods & services purchased by households. CPI measures basket of goods & services from one period to the next with in the same area ( city, region or nation).

WHOLESALE PRICE INDEX

WPI was published in 1902 and was one of the economic indicator available to policy makers until it was replaced by most developed countries by the CPI market index in 1970. WPI is the index that is used to measure the change in the average price level of goods traded in wholesale market.

INFLATION CALCULATION IN INDIA

INDIA uses the wholesale price index (WPI) to calculate and then decide the inflation rate in the economy. WPI is the index that is used to measure the change in the average price level of goods traded in wholesale market.

In INDIA ; a total of 435 commodities data on price level is tracked through WPI which is an indicator of movement in of commodities in all trade & transactions.

BASE REVISION
A working group for there vision of the index number for wholesale price in INDIA was constituted on December 26, 2003 . Under the chairmanship of prof. ABHIJIT SEN, member , planning commission. BASE (2004-05 =100) IN replacement of earlier WPI series BASE (1993-94 =100)

CLASIFICATION
The classification structure adopted in the WPI (1993-94) SERIES is as below-: Primary articles - food article - non-food -minerals Fuel , Power ,LIGHT & LUBRICANT.

MANUFACTURED PRODUCT-: BEVERAGE , TOBACCO & TOBBACCO PRODUCT TEXTILES WOOD &WOOD PRODUCTS PAPER &PAPER PRODUCT MACHINARY etc.

INFLATION RATE IN INDIA

INFLATION rate as measured by WPI with a revised base of 2004-05 declared to 8.62% in September 2010. as per ministry of finance.

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