What is Inflation Report? How Inflation Report is Calculated in India? Base of Calculation of Indian Inflation Report

August 13, 2014
Inflation Report is mirror of economy of any country. If any country’s Inflation Report get high data shows that the economical situation of this country is out of control. So every country’s Governments want to control inflation report.
Indian’s Inflation Report is in negative from 3 months, thus mean that the economy is under control of Government and this situation is positive for development of country.
Now here we will understand in brief that how inflation report is calculated in India. Inflation Report of India is calculated on Wholesale Price Index (WPI). WPI is an average of those things which trading goes in Wholesale Market. This is just like Sensex and Nifty where some best of stocks are included in these indexes. There are 400 commodities are used in index of WPI. WPI revises these commodities on scheduled time for be continue in index of WPI.
The commodities which are used in index of WPI are manufactured product, fuel, basic things etc. Many of people believe that WPI does not give the correct figure for Inflation Report. So, many countries choose the Consumer Price Index (CPI) for calculation of inflation report. CPI’s index is calculated on those prices which is paid by consumer to purchase any product. So this gives correct figure of inflation or deflation. In India, inflation report is based on WPI so the price of any thing in Wholesale market differs from those prices which is paid by last consumer. In Indian market the inflation report is in negative but the price of food and other basic things are rising day by day. It is cause of decrease of price of manufactured thing and fuel. Decrease of price of manufactured products is due to recession in export to other countries. The decrement of these two major items of index of WPI gives heavy impact on Inflation Report. On the ground of low price of these two things whole inflation report comes in negative, even the situation of price of foods and other basic things tells other stories.

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