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
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