How to measure inflation in India?

Ila Patnaik (), Ajay Shah () and Giovanni Veronese
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Ajay Shah: National Institute of Public Finance and Policy
Giovanni Veronese: Bank of Italy

Working Papers from National Institute of Public Finance and Policy

Abstract: What is the best inflation measure in India? What inflation measure is most relevant for monetary policy making in India? Questions of timeliness, weights in the price index, accuracy of food price measurement, and inclusion of services prices are relevant to the choice of measure. We show that under present conditions of measurement, the Consumer Price Index for Industrial Workers (CPI-IW) is preferable to either the Wholesale Price Index or the GDP deflator.

Keywords: Monetary policy; Inflation measure; Statistical system (search for similar items in EconPapers)
JEL-codes: E52 E58 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
Date: 2011-02
Note: Working Paper 83, 2011
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