Context:
India’s wholesale prices remained in deflationary mode for the fifth month in a row.
About WPI:
- It measures the changes in the prices of goods sold and traded in bulk by wholesale businesses to other businesses.
- Published by – Office of Economic Adviser, Ministry of Commerce and Industry.
- Most widely used inflation indicator in India.
- Base year: 2011-12
- Weightage of WPI –
- Primary Articles (Food & Non-food items)
- Fuel & Power
- Manufactured Product (highest weightage)
- Food Index
Click here to read about Index of Industrial Production
Consumer Price Index (CPI):
- It measures price changes from the perspective of a retail buyer.
- Released by: National Statistical Office (NSO), Ministry of Statistics and Programme Implementation (MoSPI)
- It calculates the difference in the price of commodities and services.
- Sub-groups –
- Food and beverages
- Fuel and light
- Housing and clothing
- Bedding and footwear
| Types of CPI | Compiled by | Base Year |
| CPI for Industrial Workers (IW) | Labour Bureau in the Ministry of Labour and Employment | 2016 |
| CPI for Agricultural Labourer (AL) | 1986-87 | |
| CPI for Rural Labourer (RL) | ||
| CPI (Rural/Urban/Combined) | NSO, MoSPI | 2012 |
Source: The Hindu
Previous Year Question
Consider the following statements:
1. The weightage of food in Consumer Price Index (CPI) is higher than that in Wholesale Price Index (WPI).
2. The WPI does not capture changes in the prices of services, which CPI does.
3. Reserve Bank of India has now adopted WPI as its key measure of inflation and to decide on changing the key policy rates.
Which of the statements given above is/are correct?
[UPSC Civil Services Exam – 2020 Prelims]
(a) 1 and 2 only
(b) 2 only
(c) 3 only
(d) 1, 2 and 3
Answer: (a)
