How the Inflation would be calculated using CPI in India ?
How the Inflation would be calculated using CPI in India ? Consumer Price Index (CPI) is an economic measurement to finding the Inflation Rate . It also used to analyze the weighted average of price changes of a collection of particular goods and services. The Goods and services are likely Food, Transportation, Clothing, Education, Medical or any other goods or services. So, the calculation for CPI is nothing but by taking the price changes in every item on the collection of goods and services and then average the total price changes, then divided by the base year. How the CPI can be calculated ? Already we know that there is a price for every item in a collection of goods and services and the collection should be averaged. The term, ‘Collection’ often referred as a ‘Basket’ . For example, if the Toned Milk priced at Rs. 45 per litre and 100 gram of butter at a price of Rs. 45 in the month of January 2018 and the total consumption is 2 litres of milk and 100 gm of butter. Then the b