The Consumer Price Index (CPI) and the Wholesale Price Index (WPI) are two most popular price indices in India that are used to measure price level changes like inflation. Though both are aiming to measure the price level situation, they are different in terms of the methodology used for measuring the price level, commodities covered, price quotes sourced, base year etc. Main difference between CPI and WPI is that the CPI measures inflation at the retail level whereas the WPI measures inflaiton at the wholesale level.
The major differences between the two are:
- the nature of the commodities selected,
- weights assigned
- the sources from which price quotations are received.
|Data procured from
|Methodology of the index
|Geometric mean for elementary item index and Laspeyres Index Formula for higher level index
|Weighted arithmetic mean according to Laspeyres Index Formula
|Price index level
|Inflation at retail level
|Inflation at wholesale level
|Office of Economic Affairs, Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industries
|Number of Commodities
|Focus on certain types of commodities
|Higher weights to primary products (57%) including food items. Selected services included.
|Higher weights to manufacturing Products (Weight 64.23%). No services item.
Comparing the WPI (2011-12 base year) and the CPI (2012 base year) shows that the WPI takes prices at the wholesale price level and the CPI takes prices at the retail level. The WPI gives high weightage to manufacturing commodities (around 63%), whereas the CPI gives high weightage to food items and other primary products (57%).
Food items have a weight of 39.1 per cent in the CPI, whereas in the WPI, all food items have a combined weight of 24.4 per cent (they are incorporated under Manufactured Food products). CPI considers services items also, but WPI does not include service items.
A notable feature of the consumer price index in India is that the prices are collected at the retail level. Hence, CPI inflation is often referred to as retail inflation.