## Indices 1. WPI - Wholesale price index comprises as far as possible all transactions at first point of bulk sale in the domestic market. 2. 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. ## Measurement 1. WPI 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 2. CPI 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. In India, CPI is calculated using the Laspeyres formula, where a  weighted arithmetic mean of price relatives (using base year weights) is calculated. 4. Core inflation excludes food and energy prices from the CPI (but not published).  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.== ## Release of Data 1. CPI 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)* 1. 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. 2. WPI 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. >==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 ### WPI 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. **Shifting of the base year from 1981-82=100 to 1993-94** 1. An [article](https://rbi.org.in/scripts/BS_ViewBulletin.aspx?Id=1788) on RBI Bulletin - July 2000 3. **Shifting of the base year from 1993-94 to 2004-05** 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. **Shifting of the base year of WPI from 2004-5 to 2011-12** 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. ### CPI 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 >[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 ## Related Notes 1. [[Inflation and RBI]] 2. [[Flexible Inflation Targeting (FIT)]] 3. [[Inflation Puzzle - 2013 by Deepak Mohanty (high inflation while growth is falling between Jan-10 to Dec-11)]] ## 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]]