Wholesale Price Index (WPI) and Consumer Price Index (CPI) are two commonly used measures that are effective in determining the inflation in the country.
WPI or Wholesale Price Index is an indicator that is used to determine the changes in the price occurring in case of goods available for wholesale in the market.
WPI is useful in calculating the change in commodity prices that occur at selected stages before it reaches retailers.
In India, WPI is used to measure the changes occurring in the price of commodities available for trading in the wholesale market.
Consumer Price Index or CPI is another price index that focuses on the sum of money that a consumer has to shell out in order to purchase a basket of goods and services over a period of time. CPI measures the price that consumers pay to retailers.
CPI is used by the Reserve Bank of India as an important tool for determining inflation, which is useful for framing the credit and monetary policy in the country.
Let us discuss some points of difference between the Wholesale Price Index and Consumer 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.|
|Office of Economic Advisor||Central Statistics Office|
|It measures the initial or first stage of a transaction||It is the final or last stage of a transaction|
|It covers only goods||It covers goods and services|
|It focuses on goods that are traded only between wholesalers or businesses||It focuses on goods that are being purchased by consumers.|
|It uses Financial Year as a reference||It uses the calendar year as a reference|
This concludes the topic of Difference between Wholesale Price Index and Consumer Price Index, which is regarded as an important topic for Commerce students. For more such informational articles, stay tuned to BYJU’S.
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