How is CPI Used: Meaning, Working and Process

How Is CPI Used?

Which Agencies Uses CPI to Take Economic Decisions?

What Is the Step-by-Step Process to Calculate the Consumer Price Index (CPI)?

An Example Showing the Computation of Consumer Price Index (CPI)

What Are the Uses of Consumer Price Index (CPI)?

FAQs About How CPI Is Used

Who is responsible for computing CPI in India?

The Ministry of Statistics and Programme Implementation (MoSPI) and Price Statistics Division (PSD) of the National Statistical Office (NSO) are involved together to calculate and determine the Consumer Price Index (CPI) for rural, urban, and various sectors in India.

What are the limitations of Consumer Price Index (CPI)?


The following are some demerits of Consumer Price Index (CPI):

  • CPI does not determine the price changes in rural, urban, or remote areas.
  • It cannot compute variations across two different areas.
  • CPI does consider the differences in spending habits between individual households.

What are the different types of CPI?

The Consumer Price Index (CPI) has been classified into four different types, which comprise CPI for Industrial Workers (CPI-IW), CPI for Rural Labourers (CPI-RL), CPI for Urban Non-Manual Employees (CPI-UNME), and CPI for Agricultural Labourers (CPI-AL).

What is the present-day CPI in India?

According to a current report, the Consumer Price Index CPI increased to 6.52% in January 2023.