Inflation Rate (CPI vs WPI)

Inflation measures the rate at which the general price level of goods and services rises over time, eroding purchasing power. In India, two primary inflation indices are tracked: the Consumer Price Index (CPI), which measures price changes from the perspective of urban and rural consumers across food, fuel, housing, and services, and the Wholesale Price Index (WPI), which tracks price changes at the producer/wholesale level across primary articles, fuel, and manufactured products. The RBI's Monetary Policy Committee uses CPI as its primary benchmark for setting interest rates, with a target range of 2–6%. Rising inflation typically prompts rate hikes, which increase borrowing costs, compress valuations, and negatively impact bond prices — making it one of the most market-sensitive economic data releases in India.