Context: India's wholesale prices recently remained in deflation for the sixth consecutive month, with inflation at -0.26% in September, a slight improvement from -0.52% in August.

Wholesale Price Index (WPI)

• About: The WPI is a gauge used to monitor and record fluctuations in the prices of bulk goods at the wholesale level within India.
• Published by: Office of Economic Adviser, Ministry of Commerce and Industry.
• Base year: WPI has been revised from 2004-05 to 2011-12 in 2017.
• Formula: WPI = (Total value of the basket of goods and services at current prices / Total value of the basket of goods and services at base year prices) x 100
• Component of WPI: Manufactured products = 65% approx (64.2% now)

o Primary articles = 20% approx (22.6% now)

o Fuel and power = 15% approx (13.1% now)

Deflation

• It is a persistent decline in the overall price level of goods and services in an economy, contrasting with inflation, which involves price increases.
• This economic condition arises when the supply of goods and services surpasses the demand, resulting in reduced consumer expenditure.