New Delhi, Aug. 24 -- There is a divergence between wholesale and retail inflation...

Consumer Price Index (CPI), India's benchmark inflation measure, grew at 6.9% in the month of July. Headline inflation has been growing at more than 6%, the upper limit of RBI's tolerance level, since December 2019. March was the only exception. India's other inflation measure, Wholesale Price Index (WPI), has been contracting since April 2020.

To be sure, this is not the first instance of divergence between the two inflation measures. A 2015 Mint story by this author pointed out that there have been four such instances since 1982-83. The divergence between the CPI and WPI is not surprising as they differ in composition. Food items have a share of almos...