Consider the following statements regarding Consumer Price Index (CPI) and Wholesale Price Index (WPI) in India:

1. CPI is released by the Ministry of Labour and Employment, while WPI is released by the Ministry of Commerce and Industry.

2. The weightage of food items is higher in CPI compared to WPI.

3. WPI does not include services, whereas CPI includes both goods and services.

4. Fuel and power have a higher weightage in WPI than in CPI.

How many of the above statements are correct?

The correct answer is option 2

Key Points

• CPI is released by the National Statistical Office (NSO), Ministry of Statistics and Programme Implementation (MoSPI), NOT by the Ministry of Labour and Employment. 
  • WPI is released by the Office of the Economic Adviser, Ministry of Commerce and Industry. Hence, Statement 1 is incorrect.
• The weightage of food items is higher in CPI (~45%) compared to WPI (~24%).  Hence, Statement 2 is correct
• WPI excludes services, whereas CPI covers both goods and services.  Hence, Statement 3 is correct
• Fuel and power have a higher weightage in WPI (~13%) compared to CPI. Hence, Statement 4 is correct.

Additional InformationWPI vs CPI

• Wholesale Price Index
  • It measures the changes in the prices of goods sold and traded in bulk by wholesale businesses to other businesses.
  • Published by the Office of Economic Adviser, Ministry of Commerce and Industry.
  • It is the most widely used inflation indicator in India.
  • Major criticism for this index is that the general public does not buy products at wholesale price.
  • The base year of All-India WPI has been revised from 2004-05 to 2011-12 in 2017.
• Consumer Price Index
  • It measures price changes from the perspective of a retail buyer. It is released by the National Statistical Office (NSO).
  • The CPI calculates the difference in the price of commodities and services such as food, medical care, education, electronics etc, which Indian consumers buy for use.
  • The CPI has several sub-groups including food and beverages, fuel and light, housing and clothing, bedding and footwear.
• 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).
  • Of these, the first three are compiled by the Labour Bureau in the Ministry of Labour and Employment. Fourth is compiled by the NSO in the Ministry of Statistics and Programme Implementation.