The panel, set up to study seasonal movements in inflation, has said that all price series in India like wholesale and consumer price indices have peak and trough months around the same time of the year mainly due to seasonality in food prices.
India follows the annual wholesale price inflation (WPI) rate and the data is published weekly. The WPI is more closely watched than the consumer price index (CPI) because it includes more products and is updated more frequently.
CPI is released monthly and with a longer time lag than WPI.
"Analysis of annual point-to-point inflation reveals that, these are susceptible to the base effect. An alternative method of measuring inflation could be month-over-month variation in WPI, using seasonally adjusted data," the panel said.
To read the full report: go to the RBI's Web site www.rbi.org.in
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