Wholesale Price Index measures the mean of the changes of goods and services' price on the basis of wholesale price. It explains the market economy and as well as the economy growth. Usually the change of prices of 26 groups of selected goods are taken to determine the Wholesale Price Index. In India, it is the most popular price index used in the business industry and policy market.
Calculation of the Wholesale Price Index:
To determine the Wholesale Price Index, data of 33 provincial capital cities and 111 other cities are taken into consideration. The data are taken directly from the respondents by interview. These respondents are chosen from such companies who will be able to represent the commercial commodities. By this way, all commodities will represent the wholesale price for every single province.
Different Commodity Groups:
Wholesale Price Index is divided into five commodity groups. These are:
- Agriculture (X),
- Manufacturing (X),
- Quarrying (X),
- Import and Export (X),
- Mining (X).
Where X represents the number of commodities. This is the way to express the number of commodities in each sector. Each of these division has again been grouped into many sub commodity group. Altogether there are 257 commodities.
Wholesale Price Index's offerings:
- Wholesale Price Index captures the price movement extensively.
- Wholesale Price Index is published weekly, with the shortest possible time gap of only two weeks.
- In economics, Wholesale Price Index is taken as an indicator of the rate of inflation.
- Wholesale Price Index analyzes the market and monetary conditions.
- Wholesale Price Index focuses on the changing nature of the economy of different kinds of services like railway, road transportation, telecoms and banking sector etc.