WPI Based Rate of Inflation
Context:
• The annual rate of inflation is 14.55% (Provisional) for the month of March 2022 (over March, 2021) as compared to 7.89% in March, 2021.
About:
• The high rate of inflation in March, 2022 is primarily due to rise in prices of crude petroleum and natural gas, mineral oils, basic metals, etc owing to disruption in global supply chain caused by Russia-Ukraine conflict.
• Provisional figures of Wholesale Price Index (WPI) are released on 14th of every month (or next working day) with a time lag of two weeks of the reference month and compiled with data received from institutional sources and selected manufacturing units across the country.
WPI & CPI:
• In India, two key indices, the WPI (Wholesale Price Index) and the CPI (Consumer Price Index), are used to assess wholesale and retail price fluctuations, respectively.
• The CPI measures the price differential between goods and services purchased by Indian consumers, such as food, medical care, education, and gadgets.
• The WPI, on the other hand, captures the items or services sold by firms to smaller businesses for resale. WPI (Wholesale Price Index) and CPI (Consumer Price Index) are both used to calculate inflation in India.
Source: THE HINDU.
