- CPI measures the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. - The Reserve Bank of India (RBI) uses CPI (Combined) as the key policy rate anchor for monetary policy decisions, targeting a specific range for inflation. - While the Wholesale Price Index (WPI) measures inflation at the producer or wholesale level, it does not capture the prices paid by final consumers and is less relevant for assessing the cost of living.