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WPI inflation: meaning, groups and how it differs from CPI
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WPI inflation is the annual change in the Wholesale Price Index, which follows the prices of goods traded in bulk between businesses, before they reach shops. It tells you about price pressure at the producer and wholesaler level. It does not include services, and it does not measure what a household pays at the shop.
Who publishes it and when
The Office of the Economic Adviser in the Department for Promotion of Industry and Internal Trade (Ministry of Commerce and Industry) publishes the index, usually around the 14th of the following month. The base year in use has been 2011-12; a revision has been in the works, so confirm the current base on the Office of the Economic Adviser site.
The three groups
| Group | Weight (2011-12 series) | Examples |
|---|---|---|
| Primary articles | 22.62% | Food articles, minerals, crude petroleum |
| Fuel and power | 13.15% | Coal, electricity, mineral oils |
| Manufactured products | 64.23% | Chemicals, metals, textiles, food products |
Manufactured products carry the highest weight. Within the 2011-12 series the weights add up to 100.
Example
If the index was 150.0 a year ago and is 156.0 now, WPI inflation = (156.0 − 150.0) ÷ 150.0 × 100 = 4.0%. The method is the same as for CPI inflation; only the basket differs.
WPI vs CPI
| Point | WPI | CPI |
|---|---|---|
| Measures | Wholesale prices | Retail prices paid by consumers |
| Services | Not included | Included |
| Publisher | Office of the Economic Adviser, DPIIT | National Statistical Office, MoSPI |
| Role | Input and producer price signal | Policy target of the RBI |
Before the inflation targeting framework, the RBI watched WPI more closely. It now treats it as an indicator, not the anchor.
How bank exams ask about it
Typical questions: "WPI is published by", "WPI does not include", "the group with the highest weight in WPI", and "which index is used by the RBI for inflation targeting". Inflation also appears in the RBI Grade B Phase II syllabus headings, where you need to explain the two indices, not just name them. The standard preparation is to keep a two-column CPI versus WPI table in your banking awareness notes.
Frequently asked questions
Why is the WPI important if the RBI uses CPI?
Businesses pay WPI-type prices for inputs, so a persistent rise can pass on to retail prices later. Analysts watch the gap between the two.
Does WPI include petrol?
Yes, mineral oils sit under fuel and power, and crude petroleum under primary articles. It is the retail price at the pump that appears in CPI.
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