UPSC Prelims 2025 CSAT Paper II · Q41 of 78 Comprehension medium

Passage

Passage – 1 A single number for inflation is an aggregate across different commodities and services — the price rise differs for different items of consumption. So, the single number is arrived at by assigning weights to different commodities and services. For WPI, the weights in production are used; for CPI, the consumption basket is used. But people are not homogeneous. The consumption basket is vastly different for the poor, the middle classes, and the rich. Hence, the CPI is different for each of these classes and a composite index requires averaging the baskets.

Which one of the following statements best reflects the most logical, rational and crucial message conveyed by the passage ?

  1. (a) We must use WPI exclusively in measuring price rise and CPI should be done away with.
  2. (b) The present calculation of inflation rate does not correctly measure price rise of individual item/commodity. ✓ UPSC's answer
  3. (c) Inflation data under-presents services in the consumption basket.
  4. (d) Knowledge of inflation rate is not really of any use to anybody in the country.

Why the answer is (b)

• The passage states that a single inflation number is an aggregate that assigns weights to different commodities and services.

• It highlights that price rises differ for individual items, meaning the aggregate figure masks specific variations.

• The text emphasizes that consumption baskets vary significantly across income groups (poor, middle, rich), requiring different CPI calculations.

• Therefore, the core message is that the single, composite inflation rate fails to accurately reflect the price rise of any specific individual item or commodity.

• This aligns with option (b), which identifies the limitation of the present calculation method regarding individual items.

Why the other options are wrong

(a) We must use WPI exclusively in measuring price rise and CPI should be done away with.
The passage does not advocate for the exclusive use of WPI or the abolition of CPI; it only explains the methodological differences between them.
(c) Inflation data under-presents services in the consumption basket.
The passage makes no mention of services being under-presented in the consumption basket; it only notes that weights are assigned to different items.
(d) Knowledge of inflation rate is not really of any use to anybody in the country.
The passage does not claim that inflation data is useless; it merely explains the technical limitations of using a single aggregate number for diverse consumption patterns.

Asked in the CSAT Paper II of the UPSC Civil Services Preliminary Examination 2025, held on 25 May 2025. Question and answer key: Union Public Service Commission. Explanation: UPSC Answer Check.

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