Definition: Wholesale Price Index (WPI) represents the price of goods at a wholesale stage i.e. goods that are sold in bulk and traded between organizations instead of consumers. WPI is used as a measure of inflation in some economies. Description: WPI is used as an important measure of inflation in India.
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What is Wholesale Price Index?
A wholesale price index (WPI) is an index that measures and tracks the changes in the price of goods in the stages before the retail level. This refers to goods that are sold in bulk and traded between entities or businesses (instead of between consumers).
How is Wholesale Price Index calculated India?
WPI= (Current Price / Base Period Price) × 100
Suppose, the total price of goods in the current year (2016) is INR 3,500. To calculate the change in prices, we consider 2010 as the Base Year. The total price of goods in the base year is INR 2,000. Now, with the help of this formula, we will calculate the WPI index.
What is India’s wholesale price 2021?
India’s WPI Inflation December 2021: The wholesale price index (WPI) grew 14.23 per cent during the month of November and it rose to 13.83 per cent in October, the data from the Ministry of Commerce & Industry showed.
What is CPI and Wholesale Price Index?
Wholesale Price Index is a measure of the average change in the price of goods at a wholesale level or in the wholesale market. Consumer Price Index is another price index that calculates price changes of goods and services that a consumer has to pay for consuming a basket of goods.
Who bring out WPI in India?
the Office of Economic Advisor
The Wholesale Price Index measures the changes in the prices of goods sold and traded in bulk by wholesale businesses to other businesses. It is published by the Office of Economic Advisor (Ministry of Commerce & Industry). The base year for WPI is 2011-12.
How many items are in WPI?
Calculation. The wholesale price index (WPI) is based on the wholesale price of a few relevant commodities of over 240 commodities available.
How is the WPI calculated?
How is the WPI calculated? A. The WPI is a Laspeyres-type index covering wage and salary costs. It measures the change in the price between the current period and the price at a given base period with the quantity and quality of labour services being held constant.
How is WPI different from CPI?
WPI is Wholesale Price Index while CPI is Consumer Price Index. Here are more details about them. WPI measures the average change in prices of goods at the wholesale level while CPI calculates the average change in prices of goods and services at retail level.
What is WPI and CPI inflation?
The two most-often used inflation rates in the country are the year-on-year. > the wholesale price index (WPI) based inflation rate and. > the consumer price index (CPI) based inflation rate. The former is called the wholesale inflation rate and the latter is called the retail inflation rate.
Why CPI is always higher than WPI?
WPI tracks inflation at the producer level and CPI captures changes in prices levels at the consumer level. WPI does not capture changes in the prices of services, which CPI does. In WPI, more weightage is given to manufactured goods, while in CPI, more weightage is given to food items.
Does India use WPI or CPI?
India uses changes in the CPI to measure its rate of inflation. The WPI measures the price of a representative basket of wholesale goods.
Is WPI calculated monthly in India?
Provisional figures of Wholesale Price Index (WPI) are released on 14th of every month (or next working day) with a time lag of two weeks of the reference month and compiled with data received from institutional sources and selected manufacturing units across the country.
What is WPI CPI and PPI?
The Producer Price Index or PPI is an index used to calculate the movement of price from the seller’s point of view. It is one of the important price indices like the Consumer Price Index (CPI) and the Wholesale Price Index (WPI).
What is wholesale price index number 11?
The Wholesale Price Index (WPI) measures the relative changes in the prices of commodities traded in the wholesale markets. In India, the wholesale price index numbers are constructed on weekly basis. Index number of agricultural production is weighted average of quantity relatives.
Why is WPI important?
The index is based on the wholesale prices of a few relevant commodities available. The commodities are chosen based on their significance in the region. These represent different strata of the economy and are expected to provide a comprehensive WPI value. The advanced base year 2011-12 adopted recently uses 697 items.
Why India chose CPI over WPI?
“Conceptually, the CPI is a better indicator of demand side pressures than the WPI… and there is no denying that consumer prices better reflect demand side pressures than wholesale prices,” Subbarao said at the RBI’s 5th Statistical day celebrations at the Mint Road office.
Why CPI is better than WPI in India?
Mainly WPI focus on prices of goods traded between business houses, whereas CPI focuses on prices of goods purchased by consumers. As CPI provides more clarity about inflation and its effect on the overall economy, it is widely used to calculate inflation compared to WPI. So, monetary policy.
What is CPI WPI and IIP?
Measurement of Inflation
Such indices are called Consumer Price Index (CPI), Producer Price Index (PPI), and Wholesale Price Index (WPI) etc. On the basis of items, the inflation indices are developed to understand the levels of inflation for certain sets/baskets of items.
What is wholesale inflation rate in India?
The previous high inflation rate recorded in the current series of the Wholesale Price Index (WPI) with a base year of 2011-12, was 14.9% in November 2021. There was no base effect at work as wholesale price inflation last April stood at 10.74%.
What is wholesale inflation India?
India’s WPI Inflation March 2022: The wholesale price index (WPI) grew 13.11 per cent during February and it rose to 13.68 per cent in January, the data from the Ministry of Commerce & Industry showed.
