Explained: How headline number won the debate on inflation targeting

Which to make the benchmark inflation rate — the core retail figure or the headline number — was the subject of considerable cut and thrust before the government threw in its lot with the latter as the reference for the central bank’s inflation targeting policy.
 
Both the Reserve Bank of India (RBI) and the finance ministry had deliberated on making the core retail figure the benchmark for inflation targeting. However, they chose headline inflation because it worked well in the previous five years.
 
Core inflation refers to inflation with price rise in fuels and food items left out.