WPI, CPI, Core Inflation — Mains Questions

Analyze the divergence between WPI and CPI inflation in India. What are the structural factors responsible for this divergence and how does it impact monetary policy decisions?

Examine the rationale behind RBI's shift from WPI-based to CPI-based inflation targeting. How has this shift improved the effectiveness of monetary policy in India?

Discuss the role of core inflation in India's monetary policy framework. How does it help in distinguishing between different types of inflationary pressures?