Context: WPI inflation has been over 10% since last 17 months which makes a cause for worry.
About Wholesale Price Index:
It captures the average movement of wholesale prices of goods and is primary used as GDP Deflator. The new series of Wholesale Price Index (WPI) with base 2011-2012 is effective from April 2017.
It only considers the basic prices and does not include taxes, rebate, trade discounts, transport and other charges.
BASIS FOR COMPARISON
WHOLESLE PRICE INDEX
(WPI)
CONSUMER PRICE INDEX (CPI)
Meaning
Wholesale Price Index (WPI), amounts to the average
Consumer Price Index (CPI), indicates the average change
Focuses on
Prices of goods traded between business houses
Prices of goods purchased by consumers
Published by
Office of Economic Advisor
Central Statistics Office
Measurement of Inflation
First stage of transaction
Final stage of transaction
Covers
Goods only
Goods and Services
Previous year Questions:
Q1- With reference to India, consider the following statements: (2010)
1. The Wholesale Price Index (WPI) in India is available on a monthly basis only.
2. As compared to Consumer Price Index for Industrial Workers (CPI(IW)), the WPI gives less weight to food articles.
Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Ans: (b)
Q2- Consider the following statements: (2020)
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. The 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?
(a) 1 and 2 only
(b) 2 only
(c) 3 only
(d) 1, 2 and 3
Ans: (a)
