Retail Inflation in India Rises to 3.9%: CPI vs WPI, RBI Inflation Target & UPSC Notes

Context: Retail Inflation in India
Retail inflation, measured by the Consumer Price Index, increased from 3.5% in April 2026 to 3.9% in May 2026 due to rising food prices. Inflation remains within the Reserve Bank of India target range.

Consumer Price Index

CPI

• Measures retail inflation.
• Compiled by the National Statistics Office.
• Ministry: Ministry of Statistics and Programme Implementation.

Wholesale Price Index

WPI

• Measures wholesale inflation.
• Compiled by the Office of Economic Adviser.
• Department: Department for Promotion of Industry and Internal Trade.
• Ministry: Ministry of Commerce and Industry.

CPI vs WPI

Food Weight

• CPI: 45.86%
• WPI Food Articles: 22.62%

So, food weight is higher in CPI than WPI.

Services

• CPI includes services.
• WPI excludes services.

RBI Target

• RBI targets CPI inflation, not WPI inflation.

Prelims Facts

CPI Base Year

• Earlier: 2012
• Revised: 2024

WPI Base Year

• Earlier: 2011–12
• Revised: 2022–23

GDP Base Year

• Earlier: 2011–12
• Revised: 2022–23

Index of Industrial Production Base Year

• Earlier: 2011–12
• Revised: 2022–23

RBI Inflation Target

• 4% ± 2%
• Target range: 2% to 6%

Monetary Policy Committee

• 6 members.
• 3 from RBI.
• 3 nominated by Central Government.
• RBI Governor has a casting vote.