'Wholesale Price Index' takes into account

The correct answer is 697 commodities.

Key Points

• The Wholesale Price Index (WPI) is one of the key measures of inflation in India, reflecting price changes in a basket of goods.
• The WPI in India considers 697 commodities and excludes services from its calculation.
• It is calculated by the Office of the Economic Adviser, Ministry of Commerce and Industry, Government of India.
• The base year for the WPI calculation is 2011-12, which ensures a more accurate reflection of current economic conditions.
• The WPI is published on a monthly basis and is used for policy formulation, price monitoring, and economic analysis.

Additional Information

• Wholesale Price Index (WPI)
  • WPI is a measure to track inflation at the wholesale level before goods reach the retail market.
  • It covers three major groups: Primary Articles, Fuel and Power, and Manufactured Products.
  • The WPI basket includes goods like cereals, textiles, metals, chemicals, and more.
  • The index is expressed as a percentage and tracks changes in the prices of commodities over time.
• Difference between WPI and CPI
  • Consumer Price Index (CPI) tracks inflation at the retail level, while WPI focuses on wholesale prices.
  • CPI includes services like healthcare and education, which are excluded from WPI.
  • CPI is more relevant for consumers, whereas WPI is used by businesses and policymakers.
• Significance of WPI
  • WPI helps in understanding price trends and inflationary pressures in the economy.
  • It is utilized for price escalation clauses in contracts and for industrial price monitoring.
  • Policy decisions related to monetary measures often consider WPI trends.