Inflation is a steady increase in the general price level over time due to demand-pull and cost-push influences. Demand-pull inflation occurs when demand for an item increases its price to a new equilibrium, like toys for Christmas. Cost-push inflation happens when production costs rise, like a tax on raw materials increasing product prices. Inflation is calculated using the Consumer Price Index (CPI) and Wholesale Price Index (WPI). The CPI measures price changes of goods and services purchased by consumers, while the WPI tracks price levels of goods traded wholesale. India's current inflation rate is around 7.5% according to the Reserve Bank of India.