Chapter 5 : Prices

TRENDS IN WPI AND CPI INFLATION

Wholesale Price Index

1. Headline inflation measured in terms of the Wholesale Price Index (WPI) (base year 2004- 05=100) which remained persistently high at 6-9 per cent during 2011-13 moderated to a low of 3.4 per cent in 2014-15(April-December) on the back of lower food and fuel prices. 
2. As fuel has larger weight in the WPI, the decline in fuel prices led to a sharper fall in the WPI as compared to the Consumer Price Index (CPI) (base year 2010=100).
3. The WPI headline inflation (provisional) in January 2015 stood at -0.4 per cent.
4. The build up inflation rate in the financial year till January 2015 was -1.1 percent compared to a build up rate of 5.2 percent in the corresponding period of the previous year.

What is Built-in inflation?