Wholesale Price Index (WPI), Commodity Group, Weightage, Uses, who publishes, Methodology
🚩Timestamps:-
00:07 Session Agenda
01:17 Wholesale Price Index (WPI)
04:19 COMMODITY GROUP AND WEIGHTAGE OF WHOLESALE PRICE INDEX
07:48 USES OF WHOLESALE PRICE INDEX
13:57 Who publishes wholesale price index?
14:18 Calculating WPI: the Methodology
18:26 Concluding Remarks
Learning Outcomes:-
Through this module, you will gain understanding
on:-
1.
Wholesale
Price Index (WPI)
2.
COMMODITY
GROUP AND WEIGHTAGE OF WHOLESALE PRICE INDEX
3.
USES
OF WHOLESALE PRICE INDEX
4.
Who
publishes wholesale price index?
5.
Calculating
WPI: the Methodology
Wholesale Price Index (WPI)
The Wholesale Price Index
(WPI) measures the relative changes in the prices of commodities traded in the
wholesale markets. In India, the wholesale price index numbers are constructed
on weekly basis.
·
In India, the new
Wholesale Price Index (WPI) series with base 2004-05 = 100 became effective
from 2010 shifting from the earlier base of 1999-2000. The Government plans to
further shift the base year to 2011-12. However, detailed modalities of this
change are yet to be worked out.
·
Presently, 2011-12 is being used as the base year.
COMMODITY GROUP AND WEIGHTAGE OF WHOLESALE
PRICE INDEX
In India, all the
commodities have been classified in the following three groups:
|
Commodity
Group |
Name of
commodities |
Weightage
% (2011-12 series) |
|
(1) Primary Articles |
These include commodities
like Rice, Fruits, Pulses, Vegetables and non-food articles like Cotton,
Jute, metals. |
22.62 |
|
(2) Fuel, Power, Light
and Lubricants |
These include items like
Coal, Petroleum Products, Electricity, LPG |
13.15 |
|
(3) Manufacturing |
It includes items like
Textiles, Sugar, Paper, Machinery, Chemicals, Fertilizers, Leather, etc. |
64.23 |
USES OF WHOLESALE PRICE INDEX
(1) Forecasting
Demand and Supply:
The wholesale price
indices are often used to forecast demand and supply situation in the economy.
An increase in wholesale price index is an indication of excess demand. It is a
situation in which demand is greater than supply. On the other hand, a decrease
in wholesale price index implies deficient demand. It is a situation in which
demand is less than supply.
(2) Estimation of Monetary Value and Real Value:
The wholesale price index
can be used to estimate the monetary value and real value of aggregates like
national income and expenditure. Monetary value is the value estimated at
current year prices. Real value is the value estimated at base year prices or
at constant prices. The monetary aggregate can be converted into real aggregate
by applying the following formula;
(3) Indicator of Rate of Inflation:
The wholesale price index
is also applied to calculate the rate of inflation in a country. It refers to
rate at which prices tend to increase over time.
Note:
The
Basic Difference of purpose behind the Consumer Price Index Number and the
Wholesale Price Index Number
·
In case of
consumer price index number, the basic purpose is to know cost of living of a
specified group of consumers in the society.
·
In case of
wholesale index number, the basic purpose is to assess the situations of
overall demand and supply in the economy. Rising prices indicate a situation of
excess demand, while falling prices suggest a situation of deficient demand.
Wholesale price index focuses on the rate of inflation in the economy.
Producer
Price Index
·
As in many
countries, in India also, efforts are afoot to shift from WPI (Wholesale Price
Index) to Producer Price Index. Producer - Price refers to the basic price
including taxes, trade margins and transport cost. Producer Price Index is
expected to offer better insights into the analysis of price trends in the
country.
WPI - Wholesale Price
Index | How Inflation is measured | Indian Economy for UPSC
https://www.youtube.com/watch?v=wL4ek96WFO4
Who publishes wholesale price index?
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Wholesale Price Index (WPI), COMMODITY GROUP AND WEIGHTAGE OF WHOLESALE PRICE INDEX, USES OF WHOLESALE PRICE INDEX, Who publishes wholesale price index?, Calculating WPI: the Methodology | Index Numbers | 11th Commerce | by @statomics11comm
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