With reference to Indian economy CPI based core inflation has remained above 4 per cent du...........

Economic Affairs Inflation

With reference to Indian economy, CPI based core inflation has remained above 4 per cent during the last four financial years. The Core inflation is considered to be a better indicator than the headline inflation because:

Core Inflation excludes certain items that are subject to sudden and short-lived price movements

It excludes food, fuel and housing prices.

Core inflation has a wider basket of items

Its conceptually more representative of inflation

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Explanation:

Core Inflation excludes certain items that are subject to sudden and short-lived price movements Core Inflation Core Inflation is the rate of inflation calculated to exclude certain items that are subject to sudden and short-lived price movements, mainly food and energy. Core inflation is considered a better indicator of overall long-term than un-adjusted headline inflation.