WHOLESALE PRICE INDEX (Syllabus: GS Paper 3 – Economy)

Context: India’s wholesale price index (WPI)-based inflation rate eased to a three-month low of 0.27 percent (year-on-year) in January due to moderation in prices of food articles and manufacturing products, according to data released by the Ministry of Commerce and Industry

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)

oPrimary articles = 20% approx (22.6% now)

oFuel and power = 15% approx (13.1% now).

Consumer Price Index (CPI)

• CPI calculates the average change in prices of goods and services at the retail (consumer) level.