Here is how WPI inflation is calculated:
Step 1: The Office of the Economic Adviser determines the basket of goods and services.
Step 2: This basket includes primary articles, fuel, power, and manufactured products.
Step 3: Prices are collected from various sources like markets, factories, and mines.
Step 4: Finally, the WPI inflation rate is calculated by determining the average of these prices.
With a better understanding of what WPI inflation is, policymakers, businesses, and investors can make informed decisions and anticipate future economic trends. WPI inflation is a good indicator that reflects the overall price trends in the economy. The Government and financial institutions closely monitor it to make monetary and fiscal policy decisions.