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Retail inflation measured by the Consumer Price Index was 4.82 per cent in August 2026, against 4.45 per cent in July.
Food inflation measured by the Consumer Food Price Index was 5.95 per cent; rural inflation at 5.23 per cent ran well above urban at 4.31 per cent.
Wholesale inflation measured by the WPI rose to 9.92 per cent from 9.78 per cent in July, driven largely by fuel and power at 22.93 per cent.
Both indices now run on new base years — CPI on 2024=100 from February 2026 and WPI on 2022-23 from June 2026.
The gap between the two is unusually wide because they measure different baskets at different stages of the supply chain.
| Aspect | Consumer Price Index | Wholesale Price Index |
|---|---|---|
| Compiled by | National Statistical Office, MoSPI | Office of the Economic Adviser, DPIIT, Ministry of Commerce & Industry |
| Current base year | 2024 = 100, new series released 12 February 2026 | 2022-23, new series released 15 June 2026 |
| Previous base year | 2012 = 100 | 2011-12 |
| What it covers | Retail prices paid by households, for goods and services | Wholesale transaction prices of goods only; services are excluded |
| Basket size | 358 weighted items — 308 goods, 50 services | 957 items, up from 697 |
| August 2026 inflation | 4.82 per cent | 9.92 per cent |
| Policy role | The statutory inflation target under the RBI Act is set in CPI terms | Used to track input costs and to deflate national-accounts aggregates |
| Release day | 12th of the following month | 14th of the following month |
Under Section 45ZA of the RBI Act, 1934, the Centre fixes an inflation target in CPI terms every five years in consultation with the RBI. A six-member Monetary Policy Committee, constituted under Section 45ZB, sets the policy rate to meet it.
Simple Analogy: The government sets the speed limit; the RBI does the driving.
Compiles the CPI and CFPI; its Field Operations Division collects the weekly price quotations from markets and villages.
Compiles the Wholesale Price Index and the new Output and trial Input Producer Price Indices.
Fixes the policy repo rate needed to meet the CPI inflation target; six members, three from the RBI and three appointed by the Central Government.
The Central Government, in consultation with the RBI, notifies the inflation target in CPI terms once every five years. The 4 per cent target with a 2-6 per cent tolerance band was first notified in 2016, retained in 2021, and retained again by a Department of Economic Affairs notification of 25 March 2026 for 1 April 2026 to 31 March 2031.
Constitutes the six-member Monetary Policy Committee that decides the policy rate against that target.
Supplies the item basket and weights for the CPI's 2024=100 series — which is why the new series carries more services than the old one.
Output PPI and a trial Input PPI are now released alongside the WPI on the 14th of the following month, as part of the same base-year revision exercise.
MoSPI's other headline monthly indicator, still on base 2011-12 after its revision from 2004-05 in May 2017 — a useful contrast when a question asks which index sits on which base.
MoSPI's data platform, where state-wise and item-wise CPI indices for the month are published.
GS Paper 3 > Indian Economy > Inflation, Money and Banking
General Awareness > Monetary Policy and Price Indices
General Awareness > Indian Economy
Which of the following brings out the 'Consumer Price Index Number for Industrial Workers'?
Answer: The Labour Bureau
Which of the following statements is/are correct regarding the Monetary Policy Committee (MPC)? 1. It decides the RBI's benchmark interest rates. 2. It is a 12-member body including the Governor of RBI and is reconstituted every year. 3. It functions under the chairmanship of the Union Finance Minister. Select the correct answer using the code given below:
Answer: 1 only
Consider the following statements: Statement-I : In the post-pandemic recent past, many Central Banks worldwide had carried out interest rate hikes. Statement-II : Central Banks generally assume that they have the ability to counteract the rising consumer prices via monetary policy means. Which one of the following is correct in respect of the above statements?
Answer: Both Statement-I and Statement-II are correct and Statement-II is the correct explanation for Statement-I
Monthly release; base-year revisions are asked in the year they occur and for several years after
The food component of the CPI, compiled for rural, urban and combined sectors; 5.95 per cent in August 2026.
The framework under which the Centre notifies a CPI inflation target and the MPC sets the policy rate to achieve it, with a tolerance band around the target.
Re-setting an index to a new reference year with a fresh basket and weights, so it reflects current consumption or production patterns.
An index of prices received by producers, introduced alongside the revised WPI series as Output PPI and a trial Input PPI.