Question map
Not attempted Correct Incorrect ★ Bookmarked
Loading…
Q67 (IAS/1997) Economy › Money, Banking & Inflation › Inflation measurement Answer Verified

In India, inflation is measured by the

Result
Your answer: —  Â·  Correct: A
Explanation

India has traditionally used the Wholesale Price Index (WPI) as the headline measure of inflation. The WPI tracks price changes at the wholesale or factory-gate/mandi level and is published monthly by the Office of the Economic Adviser, DPIIT, making it the conventional gauge for overall price movement in the economy [1]. While various Consumer Price Indices (CPIs) exist (for industrial workers, agricultural labourers, urban non-manual employees, etc.), these are sectional retail measures reflecting cost-of-living for specific groups rather than a single aggregate CPI for the country [3]. The GDP deflator is an economy-wide implicit price measure but is not the primary operational inflation indicator historically used in India.

Sources

  1. [1] Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 1: Fundamentals of Macro Economy > 2. Wholesale Price Index (WPI): > p. 32
  2. [2] https://rbidocs.rbi.org.in/rdocs/Speeches/PDFs/IAEDF140110.pdf
  3. [3] https://www.indiabudget.gov.in/budget_archive/es2008-09/chapt2009/chap41.pdf
How others answered
Each bar shows the % of students who chose that option. Green bar = correct answer, blue outline = your choice.
Community Performance
Out of everyone who attempted this question.
50%
got it right
✓ Thank you! We'll review this.

SIMILAR QUESTIONS

CAPF · 2013 · Q95 Relevance score: 6.70

The rate of inflation in India is measured generally in respect of movement of

CDS-I · 2017 · Q100 Relevance score: 4.36

Which one of the following indices is now used by the Reserve Bank of India to measure the rate of inflation in India?

CDS-II · 2009 · Q86 Relevance score: 3.63

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?

IAS · 2010 · Q115 Relevance score: 2.00

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 · 2020 · Q37 Relevance score: 1.92

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 ?