Our inflation index lens is hazy but clear enough

livemint.com:

reality through a somewhat hazy lens, however, does not deprive this gauge of its utility. Just as phone cameras with ever greater pixel counts make very little difference to most snaps, an updated index may not alter inflation readings much.

Food bills probably still dominate the cost-of-living math for most homes, although public provisions have risen. Also, a gauge need not show the absolute truth to serve its purpose as a trend revealer.

Often, what’s crucial is not the clarity of the scenario, but the direction and pace of its change. So long as a central bank can grasp price flare-ups and calm-downs with some reliability, low-pixel grabs of the retail scene work well enough.

In any case, inflation targeting operates at the aggregate level, aimed at the ‘too much money’ part instead of the ‘too little stuff’ that money is chasing, so hair need not be split over item-wise details. Outdated or not, CPI inflation needs to be quelled—by law.