UPSC Prelims Practice Questions — Food prices push retail inflation up to 3.4% in March

Q1. In the new All-India Consumer Price Index series (base 2024=100), which one of the following is the single largest component (highest weight) in the CPI basket?

  • A. Housing
  • B. Food and Beverages
  • C. Miscellaneous
  • D. Transport and Communication

Q2. With reference to the new CPI series (base 2024=100) compared with the earlier 2012 series, consider the following statements: 1. The Food and Beverages group carries a lower weight in the 2024 series than in the 2012 series. 2. The weight assigned to gold is higher in the 2024 series than in the 2012 series. 3. The item weights in the 2024 series are derived from the Household Consumption Expenditure Survey 2023-24. Which of the statements given above is/are correct?

  1. The Food and Beverages group carries a lower weight in the 2024 series than in the 2012 series.
  2. The weight assigned to gold is higher in the 2024 series than in the 2012 series.
  3. The item weights in the 2024 series are derived from the Household Consumption Expenditure Survey 2023-24.
  • A. 1 and 2 only
  • B. 1 and 3 only
  • C. 2 and 3 only
  • D. 1, 2 and 3

Q3. Under the flexible inflation targeting framework, which body is statutorily entrusted with determining the policy (repo) rate required to achieve the notified inflation target?

  • A. The Central Board of Directors of the RBI
  • B. The Monetary Policy Committee
  • C. The Financial Stability and Development Council
  • D. The Department of Economic Affairs, Ministry of Finance

Q4. With reference to the statutory flexible inflation targeting framework in India, consider the following: 1. The inflation target is set in terms of the Consumer Price Index. 2. The target is fixed by the Reserve Bank of India alone, without the Central Government. 3. The upper tolerance limit is 6% and the lower tolerance limit is 2%. 4. The target is reviewed once every five years. Which of the statements given above are correctly identified?

  1. The inflation target is set in terms of the Consumer Price Index.
  2. The target is fixed by the Reserve Bank of India alone, without the Central Government.
  3. The upper tolerance limit is 6% and the lower tolerance limit is 2%.
  4. The target is reviewed once every five years.
  • A. 1, 2 and 3
  • B. 1, 3 and 4
  • C. 2 and 4 only
  • D. 1 and 3 only

Q5. The All-India Consumer Price Index (Combined) whose monthly figures are used to assess retail inflation is compiled and released by which one of the following?

  • A. The Labour Bureau
  • B. The Reserve Bank of India
  • C. The National Statistical Office under the Ministry of Statistics and Programme Implementation
  • D. The Department of Economic Affairs

Q6. In the new CPI series (base 2024=100) released by the NSO, into how many divisions (the first level of the COICOP-2018 classification) is consumption expenditure grouped?

  • A. 6
  • B. 8
  • C. 12
  • D. 43

Q7. The retail inflation figure of 3.40% reported for March 2026 was computed using which one of the following base references?

  • A. Base 2011-12
  • B. Base 2012=100
  • C. Base 2024=100
  • D. Base 2020=100

Q8. The monthly retail inflation data, including the March 2026 figure of 3.40%, is released by which one of the following ministries?

  • A. Ministry of Finance
  • B. Ministry of Statistics and Programme Implementation
  • C. Ministry of Consumer Affairs, Food and Public Distribution
  • D. Ministry of Commerce and Industry

Q9. The rebased CPI 2024 series adopts which one of the following international classifications for grouping consumption expenditure?

  • A. International Standard Industrial Classification (ISIC)
  • B. Classification of Individual Consumption According to Purpose (COICOP) 2018
  • C. Harmonized System (HS) of the World Customs Organization
  • D. System of National Accounts (SNA) 2008

Q10. With reference to the CPI 2024 series, consider the following: 1. The base year is 2024=100. 2. Food and Beverages accounts for about 36.75% of the basket. 3. The weight of gold rose relative to the 2012 series. 4. The total number of items at the all-India level rose to 358. Which of the statements given above are correctly identified?

  1. The base year is 2024=100.
  2. Food and Beverages accounts for about 36.75% of the basket.
  3. The weight of gold rose relative to the 2012 series.
  4. The total number of items at the all-India level rose to 358.
  • A. 1, 2 and 3
  • B. 2, 3 and 4
  • C. 1, 2 and 4
  • D. 1 and 4 only

Q11. As per the NSO data for March 2026, which one of the following States recorded the lowest year-on-year retail (CPI) inflation?

  • A. Chhattisgarh
  • B. Kerala
  • C. Mizoram
  • D. Telangana

Q12. Regarding the evolution of India's inflation targeting framework, consider the following statements: 1. The statutory basis for flexible inflation targeting was inserted into the RBI Act, 1934 through the Finance Act, 2016. 2. The 4% inflation target was first notified in August 2016 for the five-year period ending March 2021. 3. The first five-year review, in 2021, lowered the inflation target from 4% to 2%. Which of the statements given above is/are correct?

  1. The statutory basis for flexible inflation targeting was inserted into the RBI Act, 1934 through the Finance Act, 2016.
  2. The 4% inflation target was first notified in August 2016 for the five-year period ending March 2021.
  3. The first five-year review, in 2021, lowered the inflation target from 4% to 2%.
  • A. 1 only
  • B. 1 and 2 only
  • C. 2 and 3 only
  • D. 1, 2 and 3