Wholesale Price Index (WPI) Overview

Why in news?

• Wholesale price inflation rose to 2.37% in December 2024 due to higher prices in non-food articles, manufactured items, and fuel & power, even though food item prices saw a slight easing.

About Wholesale Price Index (WPI):

• Purpose: The Wholesale Price Index (WPI) measures the price changes of goods traded by wholesale businesses. Unlike the Consumer Price Index (CPI), which tracks prices for consumer goods and services, WPI focuses on factory gate prices and the prices at which goods are sold by wholesalers.
• Inflation Measurement: WPI calculates inflation rates as a percentage based on price changes of wholesale commodities.
• Released by: The Department for Promotion of Industry and Internal Trade (DPIIT), under India’s Ministry of Commerce and Industry, publishes the WPI data on the 14th of every month or the next working day.
• Categories: WPI divides commodities into three main categories:
  1. Primary Articles (22.62%): Includes food and non-food items.
  2. Fuel & Power (13.15%): Includes energy products.
  3. Manufactured Products (64.23%): Covers goods produced in factories.
• Base Year: The WPI is pegged at a base year of 2011-12.
• Food Index: Within primary articles, food items have a weightage of 24.38% in the overall WPI index.

Key Takeaways:

• WPI tracks the price changes of goods at the wholesale level, rather than consumer prices.
• WPI data helps in understanding inflation trends at the production level, impacting cost structures across industries.