Enlist the difference between Wholesale Price Index (WPI) and Consumer Price Index (CPI).

March 28, 2020

 

 

Enlist the difference between Wholesale Price Index (WPI) and Consumer Price Index (CPI).

Solution:

Difference between WPI and CPI

  • WPI is for only goods whereas CPI is for goods as well as services.
  • Inflation is measure in the first stage in WPI while it is measure in final stage in CPI.
  • Item covered in WPI is fuel, power and manufacturing products and in CPI: education, food, transport, communication, recreation, apparel, housing and medical care are covered.
  • WPI covers 697 items while CPI covers 448 items for rural and 460 for urban.
  • WPI is used by very few countries whereas CPI is used by 157 countries.
  • WPI is released weekly for Primary articles, fuel and power while it is released monthly for rest of the items. CPI is released on monthly basis.

Enrich Your Learning:

Wholesale Price Index (WPI):

  • The Wholesale Price Index (WPI) is the price of a representative basket of wholesale goods.
  • Office of Economic Advisor, Department of Industrial Policy and Promotion, Ministry of Commerce and Industry calculates the WPI.
  • Figures related to WPI are published by the Office of Economic Advisor (Ministry of Commerce & Industry).
  • The current WPI with base year 2011-12 is effective from April 2017.

Calculation of WPI

  • The monthly WPI shows the average price changes of goods usually expressed in ratios or percentages.
  • The index is based on the wholesale prices of a few relevant commodities available. The commodities are chosen based on their significance in the region. These represent different strata of the economy and are expected to provide a comprehensive WPI value.

WPI Food Index

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.

Consumer Price Index (CPI):

  • CPI measures changes in the price level of a weighted average market basket of consumer goods and services purchased by households.
  • CPI is released by Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation (MOSPI).

Difference between WPI and CPI

  • WPI is for only goods whereas CPI is for goods as well as services.
  • Inflation is measure in the first stage in WPI while it is measure in final stage in CPI.
  • Item covered in WPI is fuel, power and manufacturing products and in CPI: education, food, transport, communication, recreation, apparel, housing and medical care are covered.
  • WPI covers 697 items while CPI covers 448 items for rural and 460 for urban.
  • WPI is used by very few countries whereas CPI is used by 157 countries.
  • WPI is released weekly for Primary articles, fuel and power while it is released monthly for rest of the items. CPI is released on monthly basis.

WPI focuses on the prices of goods traded between business houses whereas CPI focuses on the prices of goods purchased by consumers

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