Consider the following statements regarding weightage of different articles in Wholesale Price Index (WPI): 1. Fuel and power have higher weightage in WPI than that of primary articles. 2. Weightage of manufactured products in WPI is higher than that of fuel and power. Which of the statements given above is/are correct?
2 only
This solution analyzes the relative weightages assigned to different categories within the Wholesale Price Index (WPI) framework, specifically focusing on the statements provided regarding Primary Articles, Fuel and Power, and Manufactured Products.
Understanding Wholesale Price Index (WPI) Weightage
The Wholesale Price Index (WPI) measures the average change over time in the prices of goods sold at the wholesale, or bulk, stage. It tracks the price trends of commodities that are traded in bulk quantities. The structure of WPI is divided into three main categories:
- Primary Articles
- Fuel and Power
- Manufactured Products
Each category is assigned a specific weight based on its economic importance and contribution to the overall wholesale trade. Understanding these weightages is crucial for interpreting inflation trends at the wholesale level.
WPI Weightage: Fuel and Power vs. Primary Articles Analysis
The first statement compares the weightage of 'Fuel and Power' with 'Primary Articles' in the WPI. Let's examine their respective shares:
- Primary Articles: This group includes items like food articles, non-food articles, and minerals.
- Fuel and Power: This group comprises items such as petroleum products, coal, electricity, and natural gas.
Based on the commonly used WPI structure (with base year 2011-12), the approximate weightage assigned is:
- Primary Articles: Approximately 22.62%
- Fuel and Power: Approximately 13.15%
Comparing these figures, the weightage of 'Primary Articles' (22.62%) is higher than that of 'Fuel and Power' (13.15%). Therefore, the statement 'Fuel and power have higher weightage in WPI than that of primary articles' is incorrect.
WPI Manufactured Products Weightage Compared to Fuel and Power
The second statement compares the weightage of 'Manufactured Products' with 'Fuel and Power'.
- Manufactured Products: This is the largest group, covering a wide range of goods from food products to machinery and chemicals.
The approximate weightage for Manufactured Products in the WPI is significantly higher than other categories:
- Manufactured Products: Approximately 64.23%
- Fuel and Power: Approximately 13.15%
Clearly, the weightage of 'Manufactured Products' (64.23%) is substantially higher than that of 'Fuel and Power' (13.15%). Thus, the statement 'Weightage of manufactured products in WPI is higher than that of fuel and power' is correct.
Summary of WPI Article Weights
To summarize the comparison, here is a table showing the approximate weights of the main groups in the WPI:
| Category | Approximate Weightage (%) |
|---|---|
| Primary Articles | 22.62 |
| Fuel and Power | 13.15 |
| Manufactured Products | 64.23 |
Based on this analysis:
- Statement 1 is incorrect because Primary Articles have a higher weightage (22.62%) than Fuel and Power (13.15%).
- Statement 2 is correct because Manufactured Products have a higher weightage (64.23%) than Fuel and Power (13.15%).
Therefore, only the second statement is correct.
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