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 ?

Explicit comparative rule: 'In wholesale market services are not traded, so WPI does not include the inflation in services, while CPI and GDP deflator capture inflation in services.'

A student could use the general fact that services are not typically traded in wholesale markets to infer WPI’s exclusion of services and then check official WPI composition for 2020.

Gives a concrete scope: 'WPI takes into account 697 commodities ... but it does not take into account services.'

One can extend this by noting 'commodities' usually means goods (not services) and therefore suspect services are excluded from WPI coverage and verify via WPI item list for 2020.

Defines WPI as tracking prices in wholesale markets where goods are traded in bulk and contrasts WPI with CPI that looks at consumer prices including goods and services.

Using the rule that wholesale markets deal with bulk goods, a student could reasonably deduce WPI focuses on goods not services and then consult official WPI documentation for 2020 to confirm.

Lists a limitation: 'Services inflation (which contributes more than 50% in GDP) is not considered here.'

A student could combine this limitation with knowledge of services’ GDP share to understand why WPI would omit services and then check whether any service categories appear in the WPI 2020 basket.

Provides a short statement in a set of true/false style items: 'The WPI does not capture changes in the prices of services, which CPI does.'

A student could treat this as a textbook rule to be cross-checked against the WPI itemization or official methodology for 2020.

States the RBI Act/monetary framework identifies the inflation measure as 'CPI – Combined' and ties the inflation target to that series.

A student could infer that if the statutory target is CPI (Combined), RBI would not adopt WPI as the primary anchor and should check MPC communications around 2020 for conformity.

Explains that a committee recommended adopting CPI (Combined) instead of WPI as the nominal anchor for inflation targeting, with reasons (WPI ignores services, CPI is broader).

Using this rule, a student can argue that policy-makers preferred CPI over WPI and look for official adoption dates or MPC minutes around 2015–2020 to confirm practice.

Describes the creation of the MPC (2016) entrusted with inflation targeting and gives the numeric target (4% ±2% until Mar 2021), implying an institutional mechanism using a specific index.

A student could use this to check which price index the MPC was mandated to target (linking back to CPI as per the framework) when evaluating whether RBI switched to WPI by 2020.

Defines WPI: who publishes it (DIPP/DPIIT), its coverage and methodology (ex-factory prices), indicating WPI is a wholesale measure compiled by a ministry, not by RBI.

One can use this to reason that since WPI is compiled by a government ministry and excludes services, it is less likely to be the RBI's primary inflation target without an explicit institutional change.

Contains an exam-style item listing as a statement to be judged that 'Reserve Bank of India has now adopted WPI as its key measure', suggesting this claim is contested and taught as questionable.

A student could treat this as a prompt to verify official RBI/GOI documents or MPC statements (circa 2020) because textbooks present it as a proposition to evaluate.