IIP slows to 1.7% in January 2019, 2.57% inflation at 3-month high in February

• According to data released by Central Statistics Office (CSO), the retail inflation for the month of February has increased to 2.57% as against 2.05% in January.

• Retail inflation is based on the Consumer Price Index (CPI).

• It reflects changes in the retail prices of specified goods and services over a time period which are traded by particular consumer group.

There are four types of CPI:

• CPI-IW (Industrial Worker),

• CPI-UNME (Urban Non-Manual Employees),

• CPI-AL (Agricultural Labourers) and

• CPI-RL (Rural Labourers).

Measures taken by the RBI

• RBI has adopted CPI as the key measure for determining inflation situation of Indian economy, on recommendation of Urjit Patel Committee.

• Index of Industrial Production (IIP) decreased to 1.7% in January 2019 compared to 2.4% in December 2018. IIP measures industrial output growth. IIP is a composite indicator that measures changes in the volume of production of a basket of industrial products.

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Mains Paper 3: Economy

Prelims level: Index of Industrial Production

Mains level: Highlights of the Index of Industrial Production

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