What is the Consumer Food Price Index (CFPI)?

About the Consumer Food Price Index (CFPI):

• The Consumer Food Price Index (CFPI) is a measure of change in retail prices of food items consumed by the population.
• It is a specific measure of inflation that focuses exclusively on the price changes of food items in a consumer's basket of goods and services.
• The CFPI is a sub-component of the broader Consumer Price Index (CPI) and is used by the Reserve Bank of India (RBI) to track inflation.
• The Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation (MOSPI) started releasing CFPI for three categories -rural, urban and combined - separately on an all-India basis with effect from May 2014.
• Methodology: Like the Consumer Price Index (CPI), the CFPI is also calculated monthly and the methodology remains the same as the CPI.
  • The base year presently used is 2012.
  • The CSO has revised the CPI and CFPI Base Year from 2010 to 2012 in January 2015.

Q1: What is deflation?

Deflation is when prices decrease over time. It stands in contrast from inflation, which refers to when prices rise. It can be driven by many different factors, including an increase in productivity and the abundance of goods and services; a decrease in total or aggregate demand; or a decrease in the supply of money and credit.

Source: Consumer Price Index numbers on base 2012=100 for rural, urban and combined for May 2024