What are WPI and CPI and their significance? | UPSC Economics

WPI and CPI are important topics in Economics. Both of them are used to measure inflation in the country. Today we will be discussing in detail the WPI and CPI. 

The wholesale Price Index(WPI) is an indicator that is used to understand the changes in the price occurring in the products or goods that are available for wholesale in the market. 

It is useful in calculating the change in the prices that occur from manufacturing to various stages until it reaches the retailers. WPI is also used to understand the changes that are occurring in the price of products that are available in the wholesale market. In the recent reports, it was shown that WPI inflation was at 12.54% which means the product price has been increasing for some time. 

On the other hand, Consumer Price Index(CPI) focuses on the sum of money that consumer has to pay to purchase goods and services in a given period. In simple CPI measures the price that consumers pay to retailers. In recent reports, the CPI Inflation was at 4.48%. 

It is important to understand that there are some major differences between WPI and CPI. WPI is a measure of the average change in the price of goods at a wholesale level. CPI is the price that consumers pay to retailers. 

The WPI is published by the Office of Economic Advisor while the CPI is dealt with by the Central Statistics office. WPI is used at the beginning of the transaction process while the CPI is the end process of the transaction. 

WPI is measured by taking the financial year as a reference. On the other hand, CPI is measured by taking the calendar year as a reference. 

So this is all about WPI and CPI and they are used to measure various stages of transaction of goods, and services in the wholesale market and focus on consumers as well.

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