WHOLE SALE PRICE INDEX & CONSUMER PRICE INDEX

  • August 15, 2020
  • Posted by: OptimizeIAS Team
  • Category: DPN Topics
No Comments

Subject: Economy

Context:

India’s wholesale prices contracted for the fourth straight month in July, official data showed.

Concept:

  • Inflation can be described as the general rise in the price of goods and services in an economy over time. It’s calculated by tracking the increase in prices of essentials.
  • The primary index that tracks the change in retail prices of essential goods and services consumed by Indian households is the Consumer Price Index or CPI.
  • The index assigns different weights to various goods and services in the basket and tracks the movement of their prices. It also tracks the price movement of the entire basket on a pan-India level to calculate the overall inflation figure or CPI inflation.
  • The other index that measures inflation is the Wholesale Price Index (WPI). While retail inflation looks at the price at which the consumer buys the product, WPI is measured based on prices at the wholesale level.

Difference between WPI and CPI

economy WHOLE SALE PRICE INDEX & CONSUMER PRICE INDEX