It is essential to have different CPI for different categories of consumers because different groups of consumers have different consumption patterns and purchase different baskets of commodities. The importance of different CPIs can be understood from the following points:

Different categories of consumers, such as industrial workers, agricultural labourers, rural labourers, and urban consumers, have varying consumption habits. The weights assigned to items like food, fuel, cloth, and rent differ for each group based on their typical expenditure patterns.

Since CPI measures the average change in retail prices for a typical basket of commodities, a single index cannot accurately represent the cost of living for all consumer categories. Separate CPIs help in wage negotiation, formulation of income policy, price policy, and other economic policy decisions specific to each consumer group.