Steps to Calculate Wholesale Price Index
A wholesale price index (WPI) is in charge of measuring the overall variations in producer prices over time. Simply put, it aids in measuring inflation based on the prices of services and goods before they reach consumers. It is calculated by using the formula (Current Price / Base Period Price) × 100.
According to data provided by the Ministry of Commerce & Industry, the WPI of India inflation in May 2022 is more than 15.88% in comparison to may. In April month, it had spiked to around 15.38.
Advantages of the Wholesale Price Index
The WPI is calculated on the basis of goods and is a measure of the rate of price increase, also known as inflation. The Wholesale Price Index represents an economy's overall growth, assists businesses in budgeting, and assists the government in developing policies to improve underperforming sectors.