Inflation

Inflation is the only form of taxation that can be imposed without legislation - Milton Friedman

Inflation generally occurs when there is an imbalance in demand and supply. It can occur if the demand for the good increases suddenly or it can even occur if there is a fall in the supply of the goods. It will ultimately result in the increase of the price of the goods. 
We are aware of OPEC (Organization of petroleum exporting countries.). OPEC was established to keep the demand supply in check and hence they can charge higher rates.

CPI (IW),CPI(Agri) etc are calculated observing different patterns of consumer consumption. These specific indices are used by government to revise pay scales and pay dearness allowances. 
Headline inflation also known as WPI calculates prices using raw materials and semi furnished goods.  It does not include price of services. It is industrial inflation.
Whenever monetary inflation occurs at a very high rate, it is known as hyperinflation. After first world war, Germany started printing money without any significant output, ultimately leading to hyperinflation.
However, a small amount of Inflation is good for market. It keeps the sentiment of the market right. Stock markets remain high!