How does the inflation data mislead in India

Congress allegation of inflation data misleading in India
  • The inflation data in India is measured using the Consumer Price Index (CPI) which is based on the prices of a basket of goods and services consumed by households in urban and rural areas.
  • However, the CPI does not take into account the rising cost of essential items such as vegetables, fuel, and other commodities.
  • Moreover, the weights given to various items in the CPI basket are based on outdated consumption patterns and do not reflect the changing consumer behavior and preferences.
  • The CPI also does not capture the inflationary impact of rising asset prices such as real estate, which can have a significant impact on the overall economy.
  • The Congress party has alleged that the government is manipulating the inflation data to present a rosy picture of the economy, which is not the reality on the ground.
  • They have also pointed out that the government has changed the base year for calculating the CPI multiple times, which has made it difficult to compare the inflation rates accurately.
  • Thus, the inflation data in India can be misleading as it does not provide a comprehensive picture of the overall price movements in the economy and is open to manipulation by the government.
Overall, the inflation data in India needs to be reviewed and updated to accurately capture the changing consumption patterns and rising prices of essential commodities.
Answered a year ago
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