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- Moreover, the weights given to various items in the CPI basket are based on outdated consumption patterns and do not reflect the changing consumer behavior and preferences.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.
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a year ago