Which one of the following indices is now used by the Reserve Bank of

Which one of the following indices is now used by the Reserve Bank of India to measure the rate of Inflation in India?

Join Our Telegram Channel

NASDAQ Index

BSE Index

Consumer Price Index

Wholesale Price Index

Answer is Right!

Answer is Wrong!

This question was previously asked in

UPSC CDS-1 – 2017

Download PDF Attempt Online

The Reserve Bank of India (RBI) now uses the Consumer Price Index (CPI) to measure the rate of inflation in India for monetary policy purposes. Specifically, the CPI Combined (CPI-C) is the key measure.

Historically, the Wholesale Price Index (WPI) was the primary measure of inflation in India. However, WPI captures price changes at the wholesale level and does not reflect the prices paid by consumers. Following recommendations by committees and a shift in focus towards consumer inflation globally, the RBI officially adopted CPI-Combined as its main inflation target measure around 2014-2015.

NASDAQ and BSE Index (Sensex) are stock market indices, which measure the performance of stock markets, not inflation. CPI measures the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. WPI measures the average change in the price of commodities at the wholesale level.

More similar MCQ questions for Exam preparation:-