Economics · Economy
Consider the following statements regarding the Consumer Price Index (CPI) base revision in India: Statement I: The CPI base revision primarily updates the reference year but leaves the consumption basket and item weights unchanged to preserve long-term comparability. Statement II: Under India's inflation targeting framework, the Reserve Bank of India uses the Wholesale Price Index (WPI) as the nominal anchor for setting policy rates. Statement III: The CPI base revision exercise excludes administrative and digital price sources to avoid biases arising from non-market prices and platform-specific distortions. Which one of the following is correct?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Neither Statement II nor Statement III is correct.✓
- 2Only one of the Statements II and III is correct, and that explains Statement I.
- 3Both Statement II and Statement III are correct, but only one of them explains Statement I.
- 4Both Statement II and Statement III are correct, and both of them explain Statement I.
Correct answer
Neither Statement II nor Statement III is correct.
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