Consider the following statements:
- The weightage of food in Consumer Price Index (CPI) is higher than that in Wholesale Price Index (WPI).
- The WPI does not capture changes in the prices of services, which CPI does.
- Reserve Bank of India has now adopted WPI as its key measure of inflation and to decide on changing the key policy rates.
Which of the statements given above is/are correct?
[UPSC Civil Services Exam – 2020 Prelims]
(a) 1 and 2 only
(b) 2 only
(c) 3 only
(d) 1, 2 and 3
The weightage of items in WPI is as follows-
- Primary article – 22.62 %
- Fuel and Power – 13.51 %
- Manufactured goods – 64.23 %
While weightage of items in CPI is as follows-
- Food and Beverages – 45.86
- Housing – 10.07
- Fuel and Light – 6.84
- Clothing and Footwear – 6.53
- Pan, tobacco and intoxicants – 2.38
- Miscellaneous – 28.32