"It is not entirely erroneous conceptually, the consumer price index is a better indicator of demand-side pressure than the wholesale price index...but there is no single representative consumer price index for the whole country”, said India's Central Bank Governor Duvvuri Subbarao.

Expressing concern over the fact that the Reserve Bank of India (RBI) had to revise its inflation three times in a row in a single year as it could not match the actual estimates, Mr. Subbarao called for reconsidering of policies to wipe off the impact of inappropriate policy decision.

Contrary to other major world economies which consider consumer price index (CPI) for inflation, India counts on the wholesale price index (WPI) for ascertaining inflation.  Shockingly, the RBI has escalated the interest rates 10 times since March 2010 to cut the spiraling wings of global inflation, but failed to any good.

Owing to the volatile index of industrial production, or IIP, in addition to dynamic nature of global crude prices and uncertain global food prices, the projection for inflation has been dwindling frequently. Moreover, the RBI is reported to take corporate data points into serious consideration this time in their policy.

With the ongoing shuffle in the macroeconomic factors, the Central Bank is pondering to decipher the dominant factors directing the inflation.