Saturday, June 21, 2008

Commodities and their weightages in WPI calculation of India, Part I

As on today, India uses a basket of 435 commodities and a base year of 1993-94 for its Wholesale Price Index (WPI) based inflation rate calculation. The 435 commodities used for finding WPI range from food items like rice, wheat to petroleum products to medicines and are given weightages depending upon their importance and impact on the economy. Discussions are going on to revise the number of commodities to 980 and base year to 2004-05.

The 435 commodities are divided to various groups and subgroups. Individual commodities, and as a result, groups and subgroups have weightages. On a broader level, the 435 commodities are grouped into,

1. Primary Articles
2. Fuel, Power, Light & Lubricants
3. Manufactured Products

Primary Articles consist of food grains, fruits and vegetables, milk, eggs, meats and fishes, condiments and spices, fibers, oil seeds and minerals. Fuel, Power, Light & Lubricants consist of coal and petroleum related products, lubricants, electricity etc. Manufactured Products consist of dairy products, atta, biscuits, edible oils, liquors, cloth, toothpaste, batteries, automobiles etc. The group weightages are 22.02525%, 14.22624% and 63.74851% for Primary Articles, Fuel, Power, Light & Lubricants and Manufactured Products respectively. The total adds up to 100.

There are three more parts to this article. In the first part, we will cover Primary Articles, its sub classifications, individual commodities and their weightages. Second part is for Fuel, Power, Light & Lubricants, its sub classifications, individual commodities and their weightages and third part deals with Manufactured Products, its sub classifications, individual commodities and their weightages.

Series
- Commodities and their weightages in WPI calculation of India, Part I
- Commodities and their weightages in WPI calculation of India, Part II
- Commodities and their weightages in WPI calculation of India, Part III

Resources
- Office of the Economic Adviser, Ministry of Commerce and Industry, Govt. of India

Related Articles
- How is WPI inflation rate calculated in India?
- Inflation rates of India
- Base year and number of commodities used for inflation calculation in India
- The magic of Inflation

23 comments:

Srinivas Katharguppe said...

Very nice Sir, much appreciated; My sales guys find this very useful

- Srini

Jithu said...

> srini
thank you very much. i am yet to write the last part of the series. i will write it as soon as possible so that the series would be complete.

Nidhi said...

Sir,

Can you please post your last article of the series of "weightages in WPI"

Saravana said...

Jithu,
could you please post the pros and cons of WPI against CPI? Would be of great help to me

umang said...

Sir,
Can you please sent me the details of current inflationary trend in india due to hiking price of oil.

Anonymous said...

It would be good if you provide the authentic source of your information. This adds more accuracy and for folks that are interested in more details can look them up.

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Subodh said...

thanks for this great info. WPI is an important aspect of everyone's life, not just finace students!

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