Wholesale Price Index (WPI)

Concept: Wholesale Price Index (WPI)
Topic: Prices
Category: Economy
CNA mentions: 1 (June 15)                                                

Economics is an important subject for the civil service exam. WPI is a frequently-heard term in the news. This article talks about the Wholesale Price Index or WPI for the IAS exam.

The Wholesale Price Index (WPI) is the price of a representative basket of wholesale goods. The Wholesale Price Index concentrates on the price of goods traded between corporations, instead of goods purchased by consumers, which is measured by the Consumer Price Index. The purpose of the WPI is to monitor price movements that reflect supply and demand in industry, manufacturing and construction. This helps in assessing both microeconomic and macroeconomic conditions. The wholesale price index (WPI) is based on the wholesale price of a few relevant commodities of over 240 commodities available. The commodities chosen for the calculation are based on their importance in the region and the point of time the WPI is employed. 

In India, the Consumer Price Index (CPI) has been adopted to measure inflation instead of the Wholesale Price Index (WPI). The new series of Wholesale Price Index(WPI) with base 2011-12 is effective from April 2017 in India.

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