Why in News?
WPI inflation rises to 4.17% in Feb due to costlier food and fuel.
- WPI is an inflation indicator at the first point of bulk sale in the domestic market.
- It is published by the Office of Economic Adviser, Ministry of Commerce and Industry.
- However, a drawback of this indicator is that it does not reflect inflation impact directly on people since public does not buy products at wholesale price.
- The base year All-India WPI : 2011-12
Related Information: Consumer Price Index
- CPI measures price changes from the perspective of a retail buyer or consumer.
- It reflects changes over time in the level of retail prices of the selected goods and services basket on which consumers of a defined group spend their incomes.
- Four types of CPI are as follows:
- CPI for Industrial Workers (IW).
- CPI for Agricultural Labourer (AL).
- CPI for Rural Labourer (RL).
- CPI (Rural/Urban/Combined).
- CPI-IW, CPI-AL, CPI-RL, is released by Labour Bureau in the Ministry of Labour and Employment.
- CPI- Combined is compiled by the Central Statistical Organisation (CSO) underMinistry of Statistics and Programme Implementation.
Comparison of CPI and WPI:
- WPI, tracks inflation at the producer level while CPI captures inflation at the consumer level.
- WPI does not capture inflation of services, which CPI does.
- RBI has adopted the CPI as its key measure of inflation for monetary policy consideration.