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WPI Contracts By 3.21% Why Its Worry For Economy – Free PDF


What Is Inflation?

  • Inflation is a general and sustained increase in overall price level of goods and services.
  • The inflation rate is a key parameter basis which government proposes its monetary and fiscal policy.

Wholesale Price Index Vs Consumer Price Index

  • WPI is an indicator of price changes in the wholesale market.
  • It calculates the price paid by the manufacturers and wholesalers in the market.
  • CPI is a price index which represents the average price of a basket of goods over time.
  • It calculates the average price paid by the consumer to the shopkeepers.

Different Categories

  • The wholesale price index is measured by changes happening in three broad sectors –

Primary articles, fuel and power and manufactured products.
22.62%              13.15%                 64.23%

  • India’s wholesale inflation fell to the lowest in more than four years.
  • The Wholesale Price Index fell 3.21% in May on an annual basis, the most since November 2015, after an increase of 42% in March,
  • According to a media statement released by the Ministry of Commerce and Industry.

  • Primary articles inflation fell to -2.92% in May.
  • Fuel and power inflation was at -19.83%.
  • For manufacturing articles, inflation fell to -0.42%.
  • Food articles inflation stood at 13%.
  • Among food articles, wholesale prices of vegetables fell 12.48% in May.
  • Non-food articles inflation was at -3.53%.

Why wholesale inflation is a worry?

  • Wholesale price index is the one that determines increment in your salary.
  • If consumption is less (demand is low)
  • Wholesale inflation remains low because the manufacturers cannot increase prices of products.
  • Force manufacturers to announce DISCOUNTS to clear their stock.
  • This means factories or manufacturers are not earning more.
  • No increment to your salaries.
  • May even cut down on job




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