The WPI and CPI differ in numerous angles since they’re two indices to measure worth modifications. The most important variations embrace:
- the character of the commodities chosen,
- weights assigned
- the sources from which worth quotations are acquired.
|Knowledge procured from||Retailers||Wholesalers|
|Methodology of the index||Geometric imply for elementary merchandise index and Laspeyres Index Method for larger degree index||Weighted arithmetic imply based on Laspeyres Index Method|
|Value index degree||Inflation at retail degree||Inflation at wholesale degree|
|Ready by||CSO, MOSPI||Workplace of Financial Affairs, Division for Promotion of Business and Inner Commerce (DPIIT), Ministry of Commerce and Industries|
|Variety of Commodities||299||676|
|Concentrate on sure sorts of commodities||Increased weights to main merchandise (57%) together with meals gadgets. Chosen providers included.||Increased weights to manufacturing Merchandise (Weight 64.23%). No providers merchandise.|
Evaluating the WPI (2011-12 base yr) and the CPI (2012 base yr) exhibits that the WPI takes costs on the wholesale worth degree and the CPI takes costs on the retail degree. The WPI provides excessive weightage to manufacturing commodities (round 63%), whereas the CPI provides excessive weightage to meals gadgets and different main merchandise (57%).
Meals gadgets have a weight of 39.1 per cent within the CPI, whereas within the WPI, all meals gadgets have a mixed weight of 24.4 per cent (they’re integrated below Manufactured Meals merchandise). CPI considers providers gadgets additionally, however WPI doesn’t embrace service gadgets.
A notable characteristic of the buyer worth index in India is that the costs are collected on the retail degree. Therefore, CPI inflation is sometimes called retail inflation.
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