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Various Indian Price Indices

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Various Indian Price Indices

shape Introduction

General Awareness is an important section of most of the competitive exams for employment in the government sector in India including, but not limited to, Banking, SSC, UPSC, Railways Insurance, etc. The article Various Indian Price Indices presents the key points related to Price Indices in India with detailed explanation.

shape Price Indices

A price index is a normalized average of price relatives for a given class of goods or services in a given region, during a given interval of time. Various weighted price indices are calculated in India.


1. Wholesale Price Index (WPI)

2. Old Consumer Price Index

  • Consumer Price Index for Industrial Workers (CPI- IW)

  • Consumer Price Index for Urban Non- Manual Employees (CPI- UNME)

  • Consumer Price Index for Agriculture Labourers (CPI-AL)


  • Consumer Price Index for Rural Labourers (CPI- RL).

  • It is a statistic designed to help to compare how these price relatives, taken as a whole, differ between time periods or geographical locations.


3. New Consumer Price Index (Introduced in February 2011)

  • CPI (Rural)

  • CPI (Urban)

  • CPI (Combined)


4. Consumer Food Price Index

  • Till April 2014, the Inflation rate was measured with the help of WPI (Wholesale Price Index).

  • Currently, in India, the inflation rate is measured with the help of the Consumer Price Index– combined


Various Indian Price Indices – Wholesale Price Index:

  • It measures the change in the price of commodities traded in the wholesale market.

  • It is also known as headline inflation.

  • Current base year – 2011-12.

  • The index basket of the current series has a total of 697 items (117 items for Primary Articles, 16 items for Fuel & Power and 564 items for Manufactured Products.)

  • Published by – Economic Advisor, Ministry of Commerce & Industry.


Various Indian Price Indices – Old Consumer Price Index:

(a) Consumer Price Index for Industrial Workers (CPI- IW):

  • It measures the change in the price of commodities consumed by industrial workers.

  • Current base year– 2001

  • Published by– Labor Bureau


Consumer Price Index for Urban Non- Manual Employees (CPI- UNME)


  • It measures the change in the price of commodities consumed by Non- Manual Employees.

  • Published by– CSO (Central Statistics Office, Ministry of Statistics)

  • It has been discontinued.

  • (b) Consumer Price Index for Agriculture Laborers (CPI-AL):

    • It measures the change in the price of commodities consumed by agriculture laborers.

    • It is a subset of CPI-RL.

    • Current base year– 1986-87

    • Published by– Labor Bureau

    • Used for revising minimum wages


    (c) Consumer Price Index for Rural Laborers (CPI- RL):

    • It measures the change in the price of commodities consumed by rural laborers (include agriculture laborers, laborers of village and cottage industries).

    • Current base year– 1986-87

    • Published by– Labor Bureau

    • Used for revising minimum wages.


    Various Indian Price Indices – New Consumer Price Index:

    (a) CPI (Rural)

    • Current base year– 2012

    • Published by– CSO (Central Statistics Office, Ministry of Statistics)


    (b) CPI (Urban)

    • Current base year– 2012

    • Published by– CSO


    (c) CPI (Combined)

    • Current base year– 2012

    • Published by– CSO

    • Currently, in India the inflation rate is measured with the help of the Consumer Price Index- combined.


    Various Indian Price Indices – Consumer Food Price Index:

    • It is a measure of change in retail prices of food items consumed by the people.

    • Current base year– 2012

    • Published by– CSO


    Various Indian Price Indices – others:

    Urjit Patel committee

    The committee was appointed to examine the current monetary policy framework of the Reserve Bank of India.

    Major Recommendations of the committee are

    • CPI range should be between 4 % +/-2 %.

    • Repo rate always should be more than CPI.

    • Proposed formation of Monetary Policy committee to fix accountability.

    • Government to help RBI to achieve set targets.


    GDP Deflator

    • Used to calculate the overall price rise.

    • Known as implicit price deflator.

    • GDP Deflator = (Nominal GDP/Real GDP) × 100

    • Here Real GDP – GDP calculated at constant

    • Nominal GDP– GDP calculated at current Price

    • The GDP deflator is the most accurate because it covers all goods and services produced in the economy.

    • The other indices (WPI and CPI) derive from price quotations for select commodity baskets.

    • The government does not use it because GDP deflator data comes quarterly (not weekly/monthly basis).


    shape Quiz

    1. Currently, in India, Wholesale Price Index (WPI) is released on ____.

      A. Fortnightly basis
      B. Monthly basis
      C. Yearly basis
      D. Half Yearly basis


    Answer: Option B

    2. Which base year is taken for calculating inflation at wholesale price index (WPI) in India

      A. 2004-05
      B. 2008-09
      C. 2010-11
      D. 2011-12


    Answer: Option D

    3. Which of the following groups has the maximum weightage in the Wholesale Price Index (WPI)

      A. Primary articles
      B. Fuel
      C. Manufactured items
      D. Equal weightage


    Answer: Option C

    4. Inflation rate based on consumer price index increases if

      A. Bank rate is decreased
      B. Reverse repo rate is decreased
      C. Statutory Liquidity ratio is increased
      D. Repo rate is increased


    Answer: Option A

    5. Which of the following brings out the ‘Consumer Price Index Number for Industrial Workers

      A. The Reserve Bank of India
      B. The Department of Economic Affairs
      C. The Labour Bureau
      D. The Department of Personnel and Training


    Answer: Option C

    6. Which of the following is correct about new the CPI (Consumer Price Indices)

      A. The base year for this index is 2004-2005
      B. The CPI (combined) is computed by combining the Rural and Urban Index.
      C. The highest weight is accorded to Housing commodity group in CPI combined
      D. Food and Beverages commodity group has less than 25 percentage weight


    Answer: Option B

    7. Which of the following indices measures the average change in prices of goods and services at a place of production or at production process

      A. Consumer Price Index
      B. Wholesale Price Index
      C. Index of Industrial production
      D. Producer Price index


    Answer: Option C

    8. Wholesale Price Index (WPI) is published by which of the following ministries

      A. Ministry of Consumer Affairs, Food, and A Public Distribution
      B. Ministry of Corporate Affairs
      C. Ministry of Commerce and Industry
      D. Ministry of Food Processing Industries


    Answer: Option C

    Consider the following statements:

    1). Wholesale Price Index is calculated by the Department of Industrial Policy and Promotion.
    2). Consumer Price Index is calculated by the Central Statistics Office (CSO).
    3). The Index of Industrial Production (IIP) is an abstract number that measures the general level of Industrial activity in the
    country. Index of Industrial production (IIP) is calculated by the Central Statistics Office (CSO)

    9. Which of the above options are correct:

      A. 1 only
      B. 1 and 2 only
      C. All of the above
      D. None


    Answer: Option C

    10. Which of the following provides correct definition of GDP deflator

      A. The ratio of GDP at current prices to GDP A at constant prices.
      B. GDP at constant prices divided by the Wholesale Price Index.
      C. The ratio of GDP at constant prices to the GDP at current prices.
      D. Whole price Index divided by consumer price index


    Answer: Option A