Inflation slides to under 5% from 9% in 10 years: Find out how

financialexpress.com:

In FY14, the headline inflation in the country stood at 9.4%. In a matter of 10 years, the headline inflation has dropped to 5.5% in FY24, according to data provided by the Ministry of Finance.

During the Monetary Policy Committee (MPC) meeting of the RBI during June 5-7, it said that the headline inflation was projected to ease from 5.4% in 2023-24 to 4.5% in 2024-25. This was subject to evenly balanced risks from the rising incidence of adverse climate events, pressures from input costs and volatility in crude prices and financial markers as well as the effects of monsoon on food prices.

Headline inflation is the measure of the total inflation within an economy, encompassing the overall rise in prices of goods and services included in a specific basket. This basket typically comprises a range of essential consumer goods and services, such as food, housing, transportation, medical care, and education. In India, headline inflation is often measured using indices like the Consumer Price Index (CPI) and the Wholesale Price Index (WPI).

The CPI measures the average change over time in prices paid by consumers for a basket of goods and services. It is designed to reflect the spending patterns of households and includes items such as food, housing, clothing, transportation, healthcare, and education.

CPI calculations are based on a fixed basket of goods and services that represent what a typical consumer buys. This index is crucial for assessing changes in the cost of living for urban and rural populations.

Governments and central banks use CPI data to make decisions on monetary policy, including interest rates adjustments, and to ensure economic stability by monitoring inflation rates that directly impact consumers’