Lok Sabha Question No. 1751 (UNSTARRED), answered on 2017-03-10
Subject: Gap between Wholesale Prices and Retail Prices
Ministry: FINANCE
Asked by: LAXMAN GILUWA, PRATAPRAO GANPATRAO JADHAV

- (a)  whether  a  realistic  assessment  of  inflation  seems  almost  impossible  to  be  made owing  to  its  being  based  on  wholesale  price  instead  of  retail  prices  prevailing  in  the market;
- (b) if so, the details thereof and the reasons therefor;
- (c) whether a gap of almost half of two prices is there between the wholesale and retail prices;
- (d) if  so,  the  reasons for not assessing the inflation based on retail prices rather than wholesale prices; and
- (e) the reaction of the Government to the above reasons?

## ANSWER

MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI ARJUN RAM MEGHWAL)

- (a) to (c) The  changes in average prices at wholesale and retail levels are measured in terms of Wholesale  Price  Index  (WPI)  and  Consumer  Price  Index  (CPI)  respectively. The basket of items and their weight are different in WPI and CPI.  The gap between wholesale and retail prices has been declining in the recent months, except in January 2017, as reflected in the general inflation based on WPI and CPI (Table 1).
- (d) & (e) The headline inflation in India is now based on the CPI (base 2012=100)

| Table 1: Inflation based on WPI and CPI (combined)                                                                                                                                                 | Table 1: Inflation based on WPI and CPI (combined)                                                                                                                                                 | Table 1: Inflation based on WPI and CPI (combined)                                                                                                                                                 | Table 1: Inflation based on WPI and CPI (combined)                                                                                                                                                 | Table 1: Inflation based on WPI and CPI (combined)                                                                                                                                                 | (in per cent)                                                                                                                                                                                      | (in per cent)                                                                                                                                                                                      |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                    | Aug-16                                                                                                                                                                                             | Sep-16                                                                                                                                                                                             | Oct-16                                                                                                                                                                                             | Nov-16                                                                                                                                                                                             | Dec-16                                                                                                                                                                                             | Jan-17                                                                                                                                                                                             |
| WPI                                                                                                                                                                                                | 3.9                                                                                                                                                                                                | 3.8                                                                                                                                                                                                | 3.8                                                                                                                                                                                                | 3.4                                                                                                                                                                                                | 3.4                                                                                                                                                                                                | 5.2                                                                                                                                                                                                |
| CPI (combined)                                                                                                                                                                                     | 5.0                                                                                                                                                                                                | 4.4                                                                                                                                                                                                | 4.2                                                                                                                                                                                                | 3.6                                                                                                                                                                                                | 3.4                                                                                                                                                                                                | 3.2                                                                                                                                                                                                |
| Source: Department of Industrial Policy & Promotion and Central Statistics Office. Note: WPI inflation for the last two months and CPI (combined) inflation for the last one month is provisional. | Source: Department of Industrial Policy & Promotion and Central Statistics Office. Note: WPI inflation for the last two months and CPI (combined) inflation for the last one month is provisional. | Source: Department of Industrial Policy & Promotion and Central Statistics Office. Note: WPI inflation for the last two months and CPI (combined) inflation for the last one month is provisional. | Source: Department of Industrial Policy & Promotion and Central Statistics Office. Note: WPI inflation for the last two months and CPI (combined) inflation for the last one month is provisional. | Source: Department of Industrial Policy & Promotion and Central Statistics Office. Note: WPI inflation for the last two months and CPI (combined) inflation for the last one month is provisional. | Source: Department of Industrial Policy & Promotion and Central Statistics Office. Note: WPI inflation for the last two months and CPI (combined) inflation for the last one month is provisional. | Source: Department of Industrial Policy & Promotion and Central Statistics Office. Note: WPI inflation for the last two months and CPI (combined) inflation for the last one month is provisional. |

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