Cost of living index number/consumer price index number is the index number of the cost met by a specified class of consumers in buying a basket of goods and services.
Uses:
• It is commonly used in fixation of salary, dearness allowances to the employees.
• They are used by govt, in formulation of price policy, wage policy and general economic policies.
• They are used in evaluation of purchasing power of money and deflating the money.
• They are used for comparing cost of living of different classes of people.
