WHOLESALE PRICE INDEX

WHOLESALE PRICE INDEX

Subject : Economy

Context : WPI quickens to 2.03% after easing in December.

Concept :

Wholesale Price Index

• It is the most widely used inflation indicator in India.
• Published by the Office of Economic Adviser, Ministry of Commerce and Industry.
• All transactions at the first point of bulk sale in the domestic market are included.
• Major criticism for this index is that the general public does not buy products at wholesale price.
• The base year of All-India WPI has been revised from 2004-05 to 2011-12 in 2017.

WPI Vs CPI

• While WPI keeps track of the wholesale price of goods, the CPI measures the average price that households pay for a basket of different goods and services.
• Even as the WPI is used as a key measure of inflation in some economies, the RBI no longer uses it for policy purposes, including setting repo rates. The central bank currently uses CPI or retail inflation as a key measure of inflation to set the monetary and credit policy.