As per Government of India, inflation level is down whereas the cost of essential items viz., fine rice 1 year old is Rs.32/- kg. in A.P., Sugar is Rs.23/-, Til Oil is Rs.139/- per litre. very high prices. What is the basis of fixing inflation?
Govt of India decleares inflation figures based upon whole sale price index. We pay on basis of retail price.
A basket of various items has ben taken & different weightages assigned to each commodity.
These items apart from house hold daily consumable items also include steel, cement, furnace oil, petrol, diesel, napths to name a few which are not used by consumers in their daily consumption but they indirectly reflect on the consumer price of any commodity. Transportation uses diesel. In production of few items naptha r furnace oil are used.
Due to this, we feel otherwise.
To get the correct picture, you may check the movement of CONSUMER price index. The movement of both index may be diagonally opposite at some given point of time.
on the prices
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They have of list of items for which average prices are taken, so there are things for which prices might have come down, say like steel, cement, oil products, due to the reduction in prices of petrol and diesel etc., But the prices of the basic items might not have come down, but might have actually increased