Comparative Analysis of Past Delimitation Exercises & Their Impact on Governance

✔ GS Paper 3 (Indian Economy & Monetary Policy) ✔ Current Affairs – RBI’s Inflation Targeting Framework ✔ Impact on Economic Growth & Price Stability
Definition: Measures total inflation across the economy, including all goods and services.
Includes: Food π, Fuel ⛽, Manufactured Goods π, Services πΌ.
Volatility: Highly fluctuating due to seasonal variations in food & fuel prices.
Key Index Used: Consumer Price Index (CPI) & Wholesale Price Index (WPI) in India.
Definition: Measures inflation trends by excluding volatile items like food & fuel.
Purpose: Provides a steady π₯ and long-term inflation trend for policy decisions.
Derived From: Headline Inflation minus food & fuel components.
Importance: Used by RBI for monetary policy decisions (Inflation Targeting Framework – 4% ± 2%).
Feature | Headline Inflation π | Core Inflation π― |
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✅ GS Paper 3 – Indian Economy: Understanding inflation management crucial for RBI’s policy decisions.
✅ Monetary Policy: RBI uses Core Inflation as a basis for repo rate adjustments under inflation targeting.
✅ Impact on Welfare Schemes: High Headline Inflation affects food subsidies, PMGKAY, and MNREGA budgets.
is ✅ Current Affairs: Inflation trends influence interest rates, fiscal policy, and economic growth projections.
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