WPI

The Wholesale Price Index is a macroeconomic indicator that measures the average change in the prices of commodities at the wholesale level before they reach the retail market, serving as a primary metric for tracking inflationary trends in the production sector.

Why it matters

Acts as a key gauge for assessing the inflationary pressure on the supply side of the economy.
Used by policymakers to formulate monetary and fiscal strategies to ensure price stability.
Influences the adjustment of contracts and business agreements that are indexed to wholesale price fluctuations.

How it is asked

Focus on the components of the index, the distinction between WPI and CPI, and the role of the Office of the Economic Adviser in its compilation and periodic revision of the base year.

In the syllabus

Indian Economy GS3

In the news

WPI inflation softening 15 August

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