UPSC CSE 2025 · PYQ · Reading Comprehension / Central Idea · medium
A single number for inflation is an aggregate across different commodities and services — the price rise differs for different items of consumption. So, the single number is arrived at by assigning weights to different commodities and services. For WPI, the weights in production are used; for CPI, the consumption basket is used. But people are not homogeneous. The consumption basket is vastly different for the poor, the middle classes, and the rich. Hence, the CPI is different for each of these classes and a composite index requires averaging the baskets.
Which one of the following statements best reflects the most logical, rational and crucial message conveyed by the passage?
A.We must use WPI exclusively in measuring price rise and CPI should be done away with.
B.The present calculation of inflation rate does not correctly measure price rise of individual item/commodity.✓ Correct
C.Inflation data under-presents services in the consumption basket.
D.Knowledge of inflation rate is not really of any use to anybody in the country.
Explanation
The passage's central point is that the single inflation number is an aggregate using weights, and since consumption baskets differ across the poor, middle class, and rich, a single composite CPI cannot accurately reflect the price rise faced by individuals/different classes. Option (b) captures this — the calculation does not correctly measure individual item/commodity price rise. Option (a) is extreme and unsupported. Option (c) introduces 'services' which isn't the passage's focus. Option (d) is too sweeping.
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