India’s Consumer Price Index (CPI) inflation or retail inflation stood at 5.49% in September 2024 as opposed to 3.65% in August. This rate of inflation is the highest in nine months with the previous high being 5.69% in December 2023.

Retail food inflation, which is a component of retail inflation, grew to a staggering 9.2% in September as opposed to 5.66% in August and contributed to overall increase in retail inflation. At the same time, Wholesale Price Index (WPI) inflation increased from 1.31% in August to 1.84% in September. The increase is being attributed to increase in prices of food and to an extent, manufacturing.

Despite being on the higher side, CPI inflation is within the Reserve Bank of India’s (RBI) target of 2%-6%. In the Monetary Policy Committee (MPC) meeting during 6th - 9th October, the committee kept its inflation target for FY25 unchanged at 4.5%.

A robust kharif harvest, high reservoir levels and a hopefully robust rabi sowing season are expected to ease inflation in the coming months. 

WPI tracks change in price of goods and services traded in bulk by wholesale businesses and other companies while CPI measures changes in prices of goods and services purchased by consumers.

The Wholesale Price Index (WPI) is considered an important measure of the dynamics of price movements. It is widely used by several bodies including the government, banks, industry and businesses. Key monetary and fiscal policy changes are often linked to WPI while it also influences formulation of trade and economic policies by the Centre.

CPI numbers are released by the Ministry of Statistics and Programme Implementation (MoSPI) on a monthly basis. WPI numbers are released by the Office of the Economic Adviser to the Government of India every month.

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