WBCS.LIVE practice question

Which indicator is primarily used to measure 'Headline Inflation' in India?

Solve this multiple-choice question and check the correct answer with its explanation below.

Answer options

  1. WPI (Wholesale Price Index)
  2. CPI (Consumer Price Index)
  3. GDP Deflator
  4. IIP (Index of Industrial Production)

Correct answer and explanation

Correct answer: CPI (Consumer Price Index)

Explanation: āœ… Correct Answer: B) CPI (Consumer Price Index) šŸ“š Explanation: Since 2014, the RBI has adopted the Consumer Price Index (CPI-Combined) as the key measure for headline inflation. Headline inflation includes all items in the basket, including volatile food and fuel prices. Core inflation, however, excludes these volatile food and fuel items to show the underlying inflation trend.