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With reference to India, consider the following statements: 1. The Wholesale Price Index (WPI) in India is available on a monthly basis only. 2. As compared to Consumer Price Index for Industrial Workers (CPI(IW)), the WPI gives less weight to food articles. Which of the statements given above is/are correct?

With reference to India, consider the following statements: 1. The Wholesale Price Index (WPI) in India is available on a monthly basis only. 2. As compared to Consumer Price Index for Industrial Workers (CPI(IW)), the WPI gives less weight to food articles. Which of the statements given above is/are correct? Correct Answer Both 1 and 2

The correct answer is ​Both 1 and 2.

Key Points

  • 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.
    • The wholesale Price Index measures the changes in the prices of goods sold and traded in bulk by wholesale businesses to other businesses.
    • Wholesale price indexes (WPIs) are reported monthly in order to show the average price changes of goods. Hence, statement 1 is correct.
    • Wholesale price indexes (WPIs) are one indicator of a country's level of inflation.
  • Consumer Price Index (CPI) tracks the prices of goods and services purchased by consumers.
    • The Consumer Price Index (CPI) is a measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care. Hence, statement 2 is correct.
    • It is calculated by taking price changes for each item in the predetermined basket of goods and averaging them.
    • Changes in the CPI are used to assess price changes associated with the cost of living. 
    • The CPI is one of the most frequently used statistics for identifying periods of inflation or deflation.
    • CPI in India comprises multiple series classified based on different economic groups.
    • There are four series, viz the CPI UNME (Urban Non-Manual Employee), CPI AL (Agricultural Labourer), CPI RL (Rural Labourer) and CPI IW (Industrial Worker).
    • While the CPI UNME series is published by the Central Statistical Organisation, the others are published by the Department of Labour.
    • From February 2011 the CPI (UNME) released by CSO is replaced as CPI (urban), CPI (rural) and CPI (combined).

Additional Information

  • WPI has a sub-index called WPI Food Index, which is a combination of the Food Articles from the Primary Articles basket, and the food products from the Manufactured Products basket. 
  • Even as the WPI is used as a key measure of inflation in some economies, the RBI no longer uses it for policy purposes, including setting repo rates.

Related Questions

Consider the following statements with respect to Consumer Price Index and Wholesale Price Index in India: 1. The WPI is calculated for only goods and CPI is calculated for both goods and services.  2. The WPI is published by the Office of the Economic Advisor in the Ministry of Commerce and Industry while the CPI is published by the Central Statistical Office. 3. The WPI is published on a weekly basis for primary articles and fuel and power and is published monthly for the rest of the items, whereas the CPI is released on a monthly basis. 4. The WPI measures inflation in the initial stages of the supply chain whereas the CPI measure inflation in the later stages of the supply chain. Which among the above given statements are correct?
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With reference to consumer's rights/privileges under the provisions of law in India, which of the following statements is/are correct? 1. Consumers are empowered to take samples for food testing. 2. When a consumer files a complaint in any consumer forum, no fee is required to be paid. 3. In case of death of a consumer, his/her legal heir can file a complaint in the consumer forum on his/her behalf. Select the correct answer using the codes given below: