Retail Price Index
It is important to note that there are several economic indicators that can be used to observe the state of the economy of a particular nation, which, in the given case, is India. The retail price index or RPI is a measurement of consumer inflation. It is stated that “it is used to calculate cost of living and wage escalation” (Walters & Munichiello, 2020, para. 3). In other words, RPI is “a list of prices of goods and services that shows how much prices have changed in a given period of time” (“The retail price index,” 2022, para. 1). As of available data from December 2021, India’s RPI was equal to 117.6, whereas the value for January was 108.8 (“Retail price index,” 2022). However, the sharpest increase in the economic metric was observed between 109.6 in February and 116.2 in April, which was followed by a more gradual increase the remainder of the year (“Retail price index,” 2022). Thus, RPI is an older measurement tool to observe economic changes, but it is best used as a complementary indicator.
However, it should be noted that RPI can also be provided and calculated for a specific good or service. For example, in the case of India, the given index for rice was 109.9 in December of 2021, where the most significant bump was observed during the months of May till August (“Retail price index of rice,” 2022). In other words, the price for rice fluctuated throughout 2021 in India, with the food being the most expensive during the summer period and the lowest during the fall and winter.
Consumer Price Index
Another highly useful economic measurement indicator is the consumer price index or CPI. The latter is “is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services” (U.S. Bureau of Labor Statistics, 2022, para. 1). In other words, it “examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care” (Fernando et al., 2022, para. 1). In the case of India, CPI was equal to 157.8 in April 2021 and 166.1 in February 2022 (“India consumer price index,” 2022). Throughout 2021 and early 2022, India’s CPI steadily increased, with the highest value being observed in November 2021 (“India consumer price index,” 2022). When it comes to translating these points to percentage values, it is stated that “the retail inflation rate in India – measured by the Consumer Price Index (CPI)- came in at 6.07% in February 2022” (ET Online, 2022, para. 1). Therefore, there was significant and observable inflation in India for consumers within the nation.
Wholesale Price Index
The wholesale price index or WPI is a comprehensive inflation measurement indicator. It “measures and tracks the changes in the price of goods in the stages before the retail level” (Segal & Estevez, 2020, para. 1). In other words, the monitoring is made on goods and services sold in bulk rather than at retail distribution points. When compared to the previous indicator, “WPI is dominated by the prices of manufactured goods while the CPI is dominated by the prices of food articles” (Misra, 2022, para. 8). In the case of India, the WPI value increased from 7.89 in March 2021 to 14.27 in December of the same year (“India wholesale price index change,” 2022). For 2022, it is stated that “the wholesale price index (WPI) grew 12.96 per cent during the month of January, while the WPI for December last year was revised to 14.27 per cent from 13.56 per cent” (Express Web Desk, 2022, para. 2). Therefore, goods and services sold in bulk increased in India.
References
ET Online. (2022). CPI inflation rises to 8-month high of 6.07% in February 2022. The Economic Times.
Express Web Desk. (2022). India’s WPI inflation spikes to 13.11% in February: Govt data. The Indian Express.
Fernando, J., Westfall, P., & Rathburn, P. (2022). Retail price index (RPI). Investopedia.
India consumer price index (CPI). (2022).
India wholesale price index change. (2022).
Misra, U. (2022). Everyday economics: What are WPI and CPI inflation rates? The Indian Express.
Retail price index of rice in India from January to December 2021. (2022).
Retail price index of tables in India from January to December 2021. (2022).
Segal, T., & Estevez, E. (2020). Wholesale price index (WPI). Investopedia.
The retail price index. (2022).
U.S. Bureau of Labor Statistics. (2022). Consumer price index.
Walters, T., & Munichiello, K. (2020). Retail price index (RPI). Investopedia.