Difference between Inflation (CPI) and Inflation(WPI)

India is the only major country that uses a wholesale index to measure inflation. Most countries use the CPI as a measure of inflation, as this actually measures the increase in price that a consumer will ultimately have to pay for.

Inflation(WPI) is the inflation calculated according to the wholesale price index.In India, a total of 435 commodities data on price level is tracked through WPI which is an indicator of movement in prices of commodities in all trade and transactions. It is also the price index which is available on a weekly basis with the shortest possible time lag only two weeks.

Inflation(CPI) is the inflation calculated according to the consumer price index.CPI is a fixed quantity price index and considered by some a cost of living index. Under CPI, an index is scaled so that it is equal to 100 at a chosen point in time, so that all other values of the index are a percentage relative to this one.

  

Recently, the variation between WPI and CPI Indian Inflation is primarily on account of the high weightage given to food items in consumer price indices.The weightage given to WPI is 16% while that given to CPI is over 60% and thus the variation.