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Q86 (CDS-II/2009) Economy › Money, Banking & Inflation › Inflation measurement Answer Verified

Consider the following statement about wholesale Price index (WPI) I. It captures the price movement extensively and is, therefore, taken as an indicator of inflation. II. The office of the Economic adviser (OEA) is entrusted with the function of compilation and publication of the weekly wholesale price index number in India. Which of the statements given above is/are cocrrect?

Result
Your answer: —  Â·  Correct: A
Explanation

The correct answer is Option 1.

Statement I is correct: The Wholesale Price Index (WPI) measures the changes in the prices of goods sold and traded in bulk by wholesale entities to other businesses. It captures price movements at the first stage of transaction in the domestic market, making it a vital macroeconomic indicator for tracking inflationary pressures in the production and manufacturing sectors.

Statement II is incorrect: While the Office of the Economic Adviser (OEA), under the Ministry of Commerce and Industry, is indeed responsible for compiling and releasing the WPI, the frequency is no longer weekly. Since 2012, the WPI for "All Commodities" is released on a monthly basis. Only the price indices for "Primary Articles" and "Fuel & Power" were historically tracked weekly, but the official headline index is now a monthly publication.

Therefore, only the first statement accurately describes the nature of WPI as an inflation indicator, while the second statement fails on the technicality of its publication frequency.

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SIMILAR QUESTIONS

IAS · 2020 · Q37 Relevance score: 4.23

Consider the following statements : 1. The weightage of food in Consumer Price Index (CPI) is higher than that in Wholesale Price Index (WPI). 2. The WPI does not capture changes in the prices of services, which CPI does. 3. Reserve Bank of India has now adopted WPI as its key measure of inflation and to decide on changing the key policy rates. Which of the statements given above is/are correct ?

IAS · 2010 · Q115 Relevance score: 3.66

With reference to India, consider the following Statements: 1. The Wholesale Price Index (WPI) in India is available on a monthly basis only 2. As compared to Consumer Price Index for Industrial Workers (CPI (IW)), the WPI gives less weight to food articles. Which of the statements given above is/are correct?

IAS · 2002 · Q59 Relevance score: 3.52

Which reference to the Wholesale Price Index (WPI), consider the following statements: 1. The new WPI series with base 1993-94 = 100 became effective from April 1998 2. In the new WPI series, became effective from 1 April 2000. Statements 2 and 3 are correct 3. The weight for electricity has increased in the new WPI series Which of these statements are correct ?

CDS-I · 2024 · Q1 Relevance score: 2.95

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? (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2

CAPF · 2010 · Q44 Relevance score: 1.43

Consider the following items of wholesale price index : 1. Primary articles 2. Fuel, power, lights and lubricants 3. Manufacturing products Arrange the above items in descending order in terms of their weightage in calculating wholesale price index :