Wholesale Price Index – WPI
Recently, the figures of the Wholesale Price Index (WPI) for April, 2021 (provisional) and February, 2021 (final) have been released by the Office of the Economic Adviser of the Department of Industry and Internal Trade Promotion, Government of India.
- It may be noted that the Department for Promotion of Industry and Internal Trade works under the Ministry of Commerce and Industry, Government of India.
- According to these figures, the annual rate of inflation during April 2021 (provisional) was 49 percent as compared to April 2020.
- It may be noted that the annual rate of inflation during April 2021 has been sharp. The main reason is the increase in the prices of mineral oils like petrol, diesel etc. and manufactured products compared to the same period of the previous year.
Inflation
- Inflation generally refers to the rise in the prices of goods and services (e.g., food, clothing, housing, entertainment and transport, etc.) used by people in daily life.
- Inflation is primarily measured on the basis of two main indices in India. The first of which is the Wholesale Price Index-WPI and the second is the Consumer Price Index-CPI.
Wholesale Price Index-WPI
- The wholesale price index in India measures the change in prices of goods sold by traders in wholesale. That is, the wholesale price index is used to estimate the prices of goods at the wholesale level.
- The Wholesale Price Index is released by the Office of the Economic Adviser, Ministry of Commerce and Industry, Government of India. Manufacturing products are given the highest weightage in the wholesale price index. Its base year 2011-12 has been kept.
- Wholesale Price Indexes are released on the 14th of every month. It may be noted that the provisional figures of the wholesale price index are compiled with data obtained from institutional sources and selected manufacturing units across the country.
Consumer Price Index(CPI)
- The Consumer Price Index(CPI) is used to measure inflation at the retail level. It is directly related to consumers. India currently has five consumer price indices (CPI)
The main four of which are:
- Consumer Price Index for Industrial Workers (CPI-IW)
- Consumer Price Index for Agricultural Laborer’s (CPI-AL)
- Consumer Price Index for Rural Laborer’s (CPI-RL)
- Rural and Urban Combined Consumer Price Index-CPI (Rural/Urban/Combined).
- The first three indices are compiled and published by the Labor Bureau, the attached office of the Ministry of Labor and Employment, and the fourth type of CPI is compiled and released by the Office of National Statistics under the Ministry of Statistics and Program Implementation.
- Of these, the year 2016 is the basis of the consumer price index for industrial workers. The year 1986-87 is the basis of the consumer price index for agricultural and rural workers.
Source – PIB
