## Indices
1. They are released by the National Statistical Office (NSO) which directly under the [Ministry of Statistics and Programme Implementation (MoSPI)](https://www.mospi.gov.in/).
2. NSO was formed by merging the Central Statistics Office (CSO) and the National Sample Survey Office (NSSO) on May 23, 2019.
3. WPI - Wholesale price index comprises as far as possible all transactions at first point of bulk sale in the domestic market.
4. CPI - A Consumer Price Index (CPI) measures the changes over time in general level of retail prices of selected goods and services that households purchase for the purpose of consumption.
## Wholesale Price Index (WPI)
1. The Wholesale Price Index (WPI) is an indicator that measures the average change in the ==quoted prices of bulk wholesale transactions at the primary stage of distribution==.
2. WPI is compiled and released by the [Office of Economic Adviser](https://eaindustry.nic.in/) on 14th of every month
### Measurement
1. [[GoI_201705_WPI Manual Base Year-2011-12.pdf#page=17&selection=176,4,176,63|Method of Calculation of WPI with base year 2011-12=100]]
2. It is calculated using GM and AM, both.
3. [Method of Calculation](https://rbi.org.in/scripts/BS_ViewBulletin.aspx?Id=11608#:~:text=It%20is%20calculated%20on%20the%20principle%20of%20weighted%20arithmetic%20mean%2C%20according%20to%20the%20Laspeyres%E2%80%99%20formula%2C%20which%20has%20a%20fixed%20baseyear%20weighting%20diagram%20operative%20through%20the%20entire%20life%20span%20of%20the%20series.) until the revision of base year to 2011-12
4. It tracks 3 groups - Primary Articles, Fuel & Power and Manufactured Products.
>==Finance and Development’s [Back to Basics](https://www.elibrary.imf.org/page/basics/back-to-basics) series explains fundamental economic concepts for a general audience.==
### Shifting of the base years
1. Ever since the introduction of the Wholesale Price Index (WPI) on a regular basis, so far 7 revisions have taken place introducing the new base years:
1. 1952-53 (effective April 1956),
2. 1961-62 (effective July 1969),
3. 1970-71 (effective January 1977),
4. 1981-82 (effective January 1989),
5. 1993-94 (effective April 2000)
6. 2004-05 (effective September 2010)
7. 2011-12 (effective May 2017)
2. <span style="color:#6f1fb5;">Shifting of the base year from 1981-82=100 to 1993-94</span>
1. An [article](https://rbi.org.in/scripts/BS_ViewBulletin.aspx?Id=1788) on RBI Bulletin - July 2000
3. <span style="color:#6f1fb5;">Shifting of the base year from 1993-94 to 2004-05</span>
1. A Working Group by the (Office of the Economic Adviser), Ministry of Commerce and Industry, Department of Industrial Policy and Promotion (renamed to Department for Promotion of Industry and Internal Trade in January 2019), Government of India, for the revision of the WPI series was set up on December 26, 2003 under the Chairmanship of Prof. Abhijit Sen, Member, Planning Commission.
2. [May 2008](https://eaindustry.nic.in/archive_data/archive/wpi_technical_report.pdf) - The Working Group, submitted its technical report in May, 2008.
1. It had set up four Sub-Groups for the special tasks. These were the Sub- Groups on ‘Analytical and other related issues’, ‘Agricultural Commodities’, ‘Manufactured items’, and ‘Unorganised/ Unregistered Sector’.
2. It however, gave detailed recommendations with regard to the choice of base year, the method of selection of items, preparation of weighting diagram and collection of prices.
3. The Technical Advisory Committee (TAC) on Statistics on Prices and Cost of Living (SPCL) examined the new series of WPI with 2004- 05 as the base and endorsed the Working Group recommendation of shifting the base year from 1993-94 to 2004-05.
4. Finally, the Economic Advisory Council (EAC) to the Prime Minister (PM) agreed with:
1. shifting the base year to 2004-05,
2. extending the coverage in terms of number of commodities and number of price quotations,
3. the procedure adopted for selection of items, and
4. the determination of the weighting diagram.
5. The new base year was effective since 14th September, 2010.
6. [Box.II.5 Towards Better Price Statistics](RBI_Annual%20Report_2011.pdf#page=52&selection=7,0,7,8) in RBI's Annual Report 2011
4. <span style="color:#6f1fb5;">Shifting of the base year of WPI from 2004-5 to 2011-12</span>
1. [March 31, 2014](https://eaindustry.nic.in/uploaded_files/Technical_Report_Of_Working_Group.pdf) - A working group was set-up in March 2012, under the chairmanship of Saumitra Chaudhuri, Member, Planning Commission, which submitted its report in 2014.
2. The new base year was effective since May 2017.
3. ==[Manual of the WPI (base year 2011-12)](https://eaindustry.nic.in/uploaded_files/WPI_Manual.pdf)==
4. This new series of WPI (Base year 2011-12=100) has the following salient features and improvements over the old series:
1. The revised basket of WPI and its weighting structure conform to the structure of economy in 2011-12.
2. The number of items in the basket has increased from 676 to 697 and the number of price quotations has increased from 5482 to 8331.
3. New series of WPI does not include indirect taxes. This is in consonance with international practices and will make the new WPI conceptually closer to Producer Price Index.
4. A new “Food Index” is compiled to capture the inflation in food items.
5. Seasonality of fruits and vegetables has been updated to account for more months as they are now available for longer duration.
6. Item level aggregates for new WPI are compiled using Geometric Mean (GM) instead of Arithmetic Mean.
5. <span style="color:#6f1fb5;">Shifting of the base year of WPI from 2011-12 to 2022-23</span>
1. On June 15, 2026, the new series (base year 2022-23) with provisional data for the month of May 2026 alongside the back series from April 2023 to April 2026 was released.
2. In addition, the Office is also released new series of ==Output Producer Price Index (OPPI), Trial Input Producer Price Index (IPPI), and Service Producer Price Index (Service PPI)== of seven services, viz., Banking, Securities Transaction, Insurance, Management of Pension Funds, Railways, Air (Passenger), and Telecom with the same base year.
3. <span style="color:#C21E56;">New WPI series with base year 2022-2023 will be released for 5 years from June, 2026 considering the wide usage of WPI in price escalation clauses, along with PPI, and will be discontinued thereafter. This would give sufficient time to users to switch from WPI to PPI.</span>
4. [Index of Services Production (ISP)](Index%20of%20Services%20Production%20(ISP).md) were also released by MoSPI.
5. ==With this change, the base year 2022-23 for WPI is made consistent with that of the revised series of Gross Domestic Product (GDP) and Index of Industrial Production (IIP).==
<sub>Source - [RBI Bulletin July 2026](https://drive.google.com/file/d/1qrd_RYRYvHb_MxN0_o3TEFn69kgkogjO/view?usp=sharing)</sub>
### Release of Data
1. WPI is [released](https://eaindustry.nic.in/ ) every month by the Office Of The Economic Adviser, Department For Promotion Of Industry And Internal Trade (DPIIT) *(was Department of Industrial Policy and Promotion until January 2019)*, Ministry of Commerce and Industry, Govt of India, and not MoSPI.
2. Provisional monthly WPI for all commodities is released on 14th of every month (next working day, if 14th is holiday).
3. The provisional index is made final after a period of eight weeks/ two months. In other words, WPI data corresponding to the latest two months are provisional.
4.
## Consumer Price Index (CPI)
It measure changes over time in general level of prices of goods and services that households acquire for the purpose of consumption.
### Measurement
1. [Feb 12, 2026](MoSPI_Press%20Release_20260212_FIRST%20PRESS%20RELEASE%20OF%20CONSUMER%20PRICE%20INDEX%20ON%20BASE%202024=100.pdf) - Base year shifted to 2024, and the first Year-on-year inflation rate based on All India Consumer Price Index (CPI) with base year 2024 was released, for the month of January, 2026 over January, 2025.
2. So now the base year is 2024. The value of the index for the base year is taken 100.
1. [Manual to CPI with base year 2024=100](MoSPI_Group_202601_Expert%20Group%20Report%20on%20Comprehensive%20Updation%20of%20Consumer%20Price%20Index%20-%20January%202026.pdf)
2. [[GoI_201501_CPI Manual Base year 2012.pdf#page=23&selection=37,0,39,1|Method of Calculation of WPI with base year 2011-12=100]]
3. Core CPI excludes volatile groups like food and beverages, fuel and light from the CPI (but not published).
4. Core WPI excludes primary articles, fuel & power.
5. Headline CPI is same as CPI (General) - the overall inflation rate including food, fuel, and all other items.
6. The price data are collected from selected 1114 urban Markets and 1181 villages covering all States/ UTs through personal visits by field staff of Field Operations Division of NSO, MoSPI on a weekly roster
7. [April 1, 2014](RBI_MPS_201404_1.pdf)- In the First Bi-monthly Monetary Policy Statement 2014–15, RBI officially adopted the headline [CPI](Inflation.md) (Consumer Price Index, rural and urban, combined) as its key measure (primary indicator) of inflation. CPI (Combined) is the nominal anchor for the current monetary policy framework in India. ==In terms of FIT framework, there are inflation targets for the RBI. MPC decides the policy rate to achieve it, whereas RBI conducts all monetary policy operations.==
8. [Key Methodological improvements introduced in CPI 2024](MoSPI_Group_202601_Expert%20Group%20Report%20on%20Comprehensive%20Updation%20of%20Consumer%20Price%20Index%20-%20January%202026.pdf#page=15&selection=72,0,72,63)
1. The mathematical formulation of Laspeyres’ index has a small typo [here](MoSPI_Group_202601_Expert%20Group%20Report%20on%20Comprehensive%20Updation%20of%20Consumer%20Price%20Index%20-%20January%202026.pdf#page=59&selection=53,19,58,29).
9. In India, CPI is calculated using a combination of the ==chain-linked Jevons index and the (Young/Modified) Laspeyres formula:==
1. Lower Level (Elementary Aggregates) use the Jevons Index at the lowest level (unweighted individual prices collected from markets/villages for a specific item), MoSPI uses the Jevons Index, which takes the unweighted Geometric Mean (GM) of price relatives.
2. Higher Level (Sub-Groups to All-India Total) use the Young/Modified Laspeyres Index once elementary indices are calculated, MoSPI aggregates them up to Sub-Groups, Groups, and the Overall CPI using this index (a weighted arithmetic mean using fixed base-year expenditure weights).
### Sample Calculation
Let us make an attempt to understand how CPI is calculated.
> [!cyan]
> <span style="color:#6f1fb5;">Step 1 is Elementary level (Jevons Index). Here we use geometric mean of price relatives, no weights.</span>
>
> Here we consider Onion, prices at 2 different markets/villages
>
> | Base price ($p_0$) | Current price ($p_t$) | Price relative ($p_t/p_0$) | |
> | ------------------ | --------------------- | -------------------------- | ----- |
> | Market A | 20 | 24 | 1.20 |
> | Market B | 22 | 25 | 1.136 |
>
> $\text{Jevons Index}_\text{Onion} = \sqrt{1.20 \times 1.136} = \sqrt{1.363} = 1.168 \rightarrow 116.8$. Similarly, suppose Tomato elementary index works out to 110. Here i have considered long method.
>
> Now the short-hand (short-term formulation) method is used. The general formula for the Short-Term (Chain Base) method in Period $T_\text{n}$(like $T_2$, $T_3$, etc.) is: $\text{Index of Onion in } T_n = \dfrac{\text{Price of Onion} \text{ in } T_n}{\text{Price of Onion} \text{ in } T_{n-1}} \times \text{Index of Onion} \text{ in } T_{n-1}$
>
> <span style="color:#6f1fb5;">Step 2 - Sub-group level (Young/Modified Laspeyres): weighted arithmetic mean using fixed base-year expenditure weights</span>
>
> Let's say this sub-group is called "Vegetables" (and contains Onion and Tomato). Here we select base-year expenditure weights (fixed) as Onion = 0.6, Tomato = 0.4
>
> $\text{Vegetables Index} = (0.6 \times 116.8) + (0.4 \times 110.0) = 70.08 + 44.0 = 114.08$ (here I have converted item weights into decimals)
>
> The formula used is: $I = \dfrac{∑ (Ii_{×} W_{i})}{∑Wi}$ where,
> $\sum$ represents the summation operation,
> I = Index Number of wholesale prices of a sub-group/group/major group/All commodities,
> $W_i$= weight assigned to the i th item/sub- group/group/major group,
> $I_i$= Index of the i th item/sub- group/group/major group
>
> <span style="color:#6f1fb5;">Step 3 - Group level. We use same weighted-average logic, but go one level up</span>
>
> Here we call the Group = "Food and Beverages" (which contains sub-groups: Vegetables, Cereals, etc.). Suppose: Vegetables index = 114.08 (weight 0.3), Cereals index = 105.0 (weight 0.7)
>
> $\text{Food \& Beverages Index} = (0.3 \times 114.08) + (0.7 \times 105.0) = 34.22 + 73.5 = 107.72$
>
> So we use Geometric mean (unweighted) only at the very bottom (item-level price relatives), and arithmetic mean (weighted by fixed base-year expenditure shares) at every level above that, all the way up to Overall CPI.
>
> >[Box Producer Price Index: The Concept and Measurement](RBI_Annual%20Report_2013.pdf#page=53&selection=130,0,130,8) in RBI's Annual Report 2013
>
> <span style="color:#6f1fb5;">Step 4 - this pattern repeats one more level up to find All India Overall CPI</span>
> 1. Now this pattern repeats one more level up: Group indices (Food & Beverages, Fuel & Light, Housing, etc.) get combined the same way, that is the weighted arithmetic mean using their fixed base-year expenditure weights to produce the final **All-India Overall CPI**.
> 2. So Food & Beverages (107.72, with weight say 0.46), Fuel & Light, Housing, Miscellaneous etc. all get combined at their respective weights to arrive at the single headline CPI number.
### Drivers of CPI-C Headline Inflation
Link to [Derivation to find contribution of each group to the overall CPI Inflation](State%20of%20the%20Economy-July%202026%20Bulletin.md#^11a94a)
### Shifting of Base Year
1. Consumer Price Indices (CPI) with base 2010=100 was brought out since January, 2011.
1. [Manual to CPI with base year 2010](GoI_20101224_CPI%20Manual_Base%20year%202010.pdf)
2. *From 2010 to 2012* - The Central Statistics Office (CSO) of India revised the base year for the CPI from 2010=100 to 2012=100, effective with the release of indices for January 2015
1. Here the weight reference Year is July 2011 to June 2012 (reference period of NSS 68th Round).
2. In the revised series, MoSPI shifted from Arithmetic Mean to Geometric Mean, of the price relatives of current prices to the base prices to compile elementary/item indices. Since Geometric Mean is least affected by extreme values, therefore, this would result in reduced volatility in the indices.
3. ==This along with fall in prices of international commodity in 2014 helped RBI to achieve self-imposed inflation targets – 8 per cent by the end of 2014; 6 per cent by end-2015 and 5 per cent by end-2016, as announced in the .==
4. [Report](https://cpi.mospi.gov.in/PDFile/Report_of_the_Group_of_TAC_on_SPCL_on_Base_Revision_of_CPI.pdf) of the Group of Technical Advisory Committee on Statistics of Prices and Cost of Living - 2014
5. [Manual to CPI with base year 2012](https://cpi.mospi.gov.in/PDFile/CPI-Changes_in_the_Revised_Series.pdf).
3. *From 2012 to 2024* - [Feb 12, 2026](MoSPI_Press%20Release_20260212_FIRST%20PRESS%20RELEASE%20OF%20CONSUMER%20PRICE%20INDEX%20ON%20BASE%202024=100.pdf) - Base year shifted to 2024, and the first year-on-year inflation rate based on All India Consumer Price Index (CPI) with base year 2024 was released, for the month of January, 2026 over January, 2025.
1. [Manual to CPI with base year 2024](MoSPI_Group_202601_Expert%20Group%20Report%20on%20Comprehensive%20Updation%20of%20Consumer%20Price%20Index%20-%20January%202026.pdf) - Expert Group Report on Comprehensive Updation of Consumer Price Index - January 2026
4. The latest classification framework is COICOP 2018. The CPI 2024 series is mostly aligned with COICOP 2018 with 12 Divisions *(12th division is omitted and hence #13 appears in monthly data release)*, 43 Groups, 92 Classes and 162 Sub- classes.
### Release of Data
1. An example of CPI data release - [Link](https://mospi.gov.in/sites/default/files/press_release/CPI_PR_12june24.pdf)
1. The table contains index values of the latest two months of the current financial year followed by index values of the corresponding months of the last year.
2. [CPI](https://cpi.mospi.gov.in/Default1.aspx) is released by the Price Statistics division, Director General (Central Statistics), National Statistical Office (NSO), Ministry of Statistics and Programme Implementation (MOSPI), Government of India.
1. [Nov 5, 2024](https://cpi.mospi.gov.in/PressRelease.aspx) - MOSPI decided to revise the release time for the Consumer Price Index (CPI) and IIP from 5.30 PM to 4.00 PM on 12th of every month (the next working day if the 12th falls on a holiday of CPI) and Previous working day if 12th falls on a holiday in case of IIP).
2. [FaQs on MOSPI (and CPI)](https://www.mospi.gov.in/faq)
3. [Organisation Structure](https://www.mospi.gov.in/organization-structure) of MoSPI.
3. CPIs compiled and released at national level on monthly basis were:
1. CPI for Industrial Workers ([CPI-IW](https://labourbureau.gov.in/consumer-price-index-numbers-for-industrial-workers)),
1. It is being compiled, maintained and disseminated by the Labour Bureau since its inception in October, 1946
2. CPI for Agricultural Laborers (CPI-AL),
3. CPI for Rural Labourers ([CPI-RL](https://labourbureau.gov.in/consumer-price-index-numbers-for-agricultural-and-rural-labourers)), and
4. *CPI for Urban Non- Manual Employees (UNME)* - It has been discontinued effective December 2010.
4. While the first three are compiled by the Labour Bureau in the Ministry of Labour and Employment, the fourth was done by the Central Statistical Organisation (CSO) in the Ministry of Statistics and Programme Implementation (MoSPI).
5. January 2011 - CPI (Rural, Urban and Combined) for all-India and States/UTs was introduced. From 2010-11, the first such index was released.
6. All India CPI data corresponding to the latest month is provisional. Example-In April, provisional data for March and final data for Feb. is released.
7. [Consumer Price Index for Industrial Workers](https://labourbureau.gov.in/CPI) (base year 2016=100) is [released](https://labourbureau.gov.in/newscontent/pr) on the last working day of every month by the Labour Bureau, Government of India.
8. For monetary policy, RBI monitors the consumer price index (CPI General) inflation.
## Related Notes
1. <span style="background-color:#fff9ae;">[Inflation and RBI](Inflation%20and%20RBI.md)</span>
2. [Index of Services Production (ISP)](Index%20of%20Services%20Production%20(ISP).md)
3. [[Flexible Inflation Targeting (FIT)]]
4. [[Inflation Puzzle - 2013 by Deepak Mohanty (high inflation while growth is falling between Jan-10 to Dec-11)]]
5. [Producer Price Index (PPI)](Producer%20Price%20Index%20(PPI).md)
## References
### [[Publications (Data Releases) & Research#Research|Research]]
[[Working Paper Series (WPS)|Working Paper Series]]
1. Praggya Das, Asish Thomas George. Mar 24, 2017. ==Comparison of Consumer and Wholesale Prices Indices in India: An Analysis of Properties and Sources of Divergence==. RBI WPS (DEPR): 05/2017. [Link](https://rbi.org.in/scripts/PublicationsView.aspx?Id=17450)
### [[Publications (Data Releases) & Research#Publications|Publications]]
1. RBI. (June, 2000). New Series of Wholesale Price Index Numbers (Base: 1993-94=100). RBI Bulletin-July, 2005. [Link](https://rbi.org.in/scripts/BS_ViewBulletin.aspx?Id=1788).
2. RBI. (Nov, 2010). New Series of Wholesale Price Index Numbers (Base: 2004-05=100). RBI Bulletin- Nov, 2011. [Link](https://rbi.org.in/scripts/BS_ViewBulletin.aspx?Id=11608#L1)
3. RBI. (Aug, 2011). [Box.II.5 Towards Better Price Statistics](RBI_Annual%20Report_2011.pdf#page=52&selection=7,0,7,8). RBI's Annual Report 2011. [pdf](RBI_Annual%20Report_2011.pdf#page=52&selection=7,0,7,8)
### Others
1. Ministry of Commerce and Industry. (May 2008). ==Report of Working Group on revision of WPI series from 1993-94 to 2004-5==. [Link](https://eaindustry.nic.in/archive_data/archive/wpi_technical_report.pdf)
2. Office of the Office of the Economic Adviser, DPIIT, MoCI, GoI. (March, 2012) ==Working Group for the revision of the Wholesale Price Index Numbers (Base: 2004-05= 100) - Manual of WPI (base year 2011-12)==. [Link](https://eaindustry.nic.in/uploaded_files/WPI_Manual.pdf)
3. Ministry of Commerce and Industry. (March 31, 2014). ==Report of Working Group on revision of WPI series from 2004-5 to 2004-5==. [Link](https://eaindustry.nic.in/archive_data/archive/wpi_technical_report.pdf)
4. Graham White. (Sept, 2014). ==Measures of Inflation in India==. Bulletin (Reserve Bank of Australia) – Sept 2014|Section - Global Economy. [Link](https://www.rba.gov.au/publications/bulletin/2014/sep/5.html)
5. MoSPI. (2015). ==Manual of CPI (base year 2012=100)==. [Link](https://cpi.mospi.gov.in/PDFile/CPI-Changes_in_the_Revised_Series.pdf)
6. MoSPI. (2026). Manual of CPI (base year 2024=100) - Expert Group Report on Comprehensive Updation of Consumer Price Index - January 2026. [pdf](MoSPI_Group_202601_Expert%20Group%20Report%20on%20Comprehensive%20Updation%20of%20Consumer%20Price%20Index%20-%20January%202026.pdf)
[[Inflation and RBI#References|More References]]