In India, inflation is measured on the basis of–

Q. In India, inflation is measured on the basis of–

(a) Wholesale Price Index

(b) Producer Price Index
(c) Consumer Price Index

(d) No option is correct

Answer: Consumer Price Index

Measurement of Inflation in India

Many developing countries use changes in the consumer price index (CPI) as their central measure of inflation. India used WPI as the measure for inflation but new CPI(combined) is declared as the new standard for measuring inflation ( April 2014) CPI numbers are typically measured monthly, and with a significant lag, making them unsuitable for policy use. India uses changes in the Consumer Price Index (CPI) to measure its rate of inflation.

A consumer price index (CPI) measures changes in the price level of a market basket of consumer goods and services purchased by households.