The 'fine print' on WPI and Retail prices

Wholesale Price Index, a measure of inflation in the Indian economy is not the true picture of prices consumers face, in Retail stores.
  • When WPI comes down, it does not mean prices are declining; it merely signifies that prices are going up at a slower rate.
  • The weightage of primary articles (including food items) has come down from over 40 per cent to over 20 per cent; this means that the rise in prices of food items has little impact on the index
  • WPI does not reflect changing consumption patterns; it totally omits services
  • What's relevant for consumers is the CPI(Consumer price Index), not WPI; CPI reflects the change in retail prices

Pic :


Popular Posts