Is the CPI the new IIP?

The RBI cut interest rates by a surprise 50 basis points on April 17. The immediate reaction of most analysts was that this was the last rate cut and that the RBI will soon be forced to raise rates again. The reason: inflation was alive and well and too high for comfort. The RBI itself had noted in its policy statement that “CPI inflation, as measured by the new series, had increased sharply from 7.7 per cent in January to 8.8 per cent in February”.

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