WPI major groups
Also called: WPI components · Topic: Inflation and Index Numbers: CPI, WPI, IIP and the Deflator · NCERT: Class 11, Ch 7 "Index Numbers"
Meaning
The Wholesale Price Index (WPI) is split into three major groups. Each has a weight showing its share in the index (2011-12 series):
- Primary articles: 22.62. Raw goods such as food articles and minerals.
- Fuel and power: 13.15.
- Manufactured products: 64.23, the largest group.
These weights explain what the WPI responds to. It is sensitive to global commodities, crude oil and metals rather than to the monsoon. The WPI covers goods only, not services, and is compiled by the OEA, DPIIT.
Example
In 2022, the commodity and oil shock raised prices of fuel and manufactured goods. WPI inflation reached double digits while CPI inflation stayed around 7%.
Don't confuse with
- CPI-Combined groups: food and beverages are the heaviest at 45.86 (2012 series), and services such as housing are included. That is why CPI and WPI inflation often diverge.
- WPI Food Index (24.23): cuts across two major groups, taking food articles from primary articles and food products from manufactured products.