Assignment 2

Muhammad Mahatab, Section B, Roll No. 270, FMS Delhi ’23-’25

Composition of CPI and WPI baskets

CPI Basket
Group Sub-group Description CPI (Rural) CPI (Urban) CPI (Combined)
Code code Weights Weights Weights
1.01 Cereals and products 12.35% 6.59% 9.67%
1.02 Meat and fish 4.38% 2.73% 3.61%
1.03 Egg 0.49% 0.36% 0.43%
1.04 Mik and products 7.72% 5.33% 6.61%
1.05 Oils and fats 4.21% 2.81% 3.56%
1.06 Fruits 2.88% 2.90% 2.89%
1.07 Vegetables 7.46% 4.41% 6.04%
1.08 Pulses and products 2.95% 1.73% 2.38%
1.09 Sugar and confectionery 1.70% 0.97% 1.36%
1.10 Spices 3.11% 1.79% 2.5%
1.11 Non-alcoholic beverages 1.37% 1.13% 1.26%
1.12 Prepared meals, snacks, sweets, etc. 5.56% 5.54% 5.55%
1 Food and Beverages 54.18% 36.29% 45.86%
2 Pan, Tobacco, and Intoxicants 3.26% 1.36% 2.38%
3.01 Clothing 6.32% 4.72% 5.58%
3.02 Footwear 1.04% 0.85% 0.95%
3 Clothing and Footwear 7.36% 5.57% 6.53%
4 Housing # 21.67% 10.07%
5 Fuel and Light 7.94% 5.58% 6.84%
6.01 Household goods and services 3.75% 3.87% 3.80%
6.02 Health 6.83% 4.81% 5.89%
6.03 Transport and communication 7.60% 9.73% 8.59%
6.04 Recreation and amusement 1.37% 2.04% 1.68%
6.05 Education 3.46% 5.62% 4.46%
6.06 Personal care and effects 4.25% 3.47% 3.89%
6 Miscellaneous 27.26% 29.53% 28.32%

CPI (Rural) Basket Weights

Miscellaneous
27.26%
Food and Beverages 54.18%
Fuel and Light 7.94%

Housing
0.00% Pan, Tobacco, and
Intoxicants
Clothing and Footwear 7.36% 3.26%
Food and Beverages
Housing
Pan, Tobacco, and Intoxicants Clothing and Footwear
Fuel and Light Miscellaneous
 CPI (Urban) Basket Weights
Food and Beverages
Miscellaneous36.29%
29.53%

Pan, Tobacco, and

Intoxicants 1.36%
Fuel and Light
5.58%

Clothing and
Housing Footwear 5.57%
21.67% Pan, Tobacco, and Intoxicants Clothing and Footwear
Food and Beverages
Housing
Fuel and Light Miscellaneous

CPI (Combined) Basket Weights

Miscellaneous
28.32% Food and Beverages
45.86%

Fuel and Light

6.84%

Housing
10.07% Pan, Tobacco, and
Intoxicants 2.38%

Clothing and Footwear

6.53%
Food and Beverages Pan, Tobacco, and Intoxicants Clothing and Footwear
HousingFuel and LightMiscellaneous

Composition of WPI Basket

Group Subgroup Commodities/Major WPI Weight

Code Code Groups/Groups/Subgroups/Items
1 PRIMARY ARTICLES 22.62%
A Food Articles 15.26%
A.01 Cereals 2.82%
A.02 Paddy 1.43%
A.03 Wheat 1.03%
A.04 Pulses 0.64%
A.05 Vegetables 1.87%
A.06 Potato 0.28%
A.07 Onion 0.16%
A.08 Fruits 1.60%
A.09 Milk 4.44%
 A.10 Eggs, Meat & Fish 2.40%
B Non-Food Articles 4.12%
B.01 Oil Seeds 1.12%
C Minerals 0.83%
D Crude Petroleum & Natural Gas 2.41%
D.01 Crude Petroleum 1.95%
2 FUEL & POWER 13.15%
2.01 LPG 0.64%
2.02 Petrol 1.60%
2.03 HSD 3.10%
3 MANUFACTURED PRODUCTS 64.23%
3.01 Mf/o Food products 9.12%
3.02 Vegetables & Animal Oil & Fats 2.64%
3.03 Mf/o Beverages 0.91%
3.04 Mf/o Tobacco Products 0.51%
3.05 Mf/o Textiles 4.88%
3.06 Mf/o Wearing Apparel 0.81%
3.07 Mf/o Leather & Related Products 0.54%
3.08 Mf/o Wood & of Products of Wood and Cork 0.77%
3.09 Mf/o Paper and Paper Products 1.11%
3.10 Mf/o Chemicals and Chemical Products 6.47%
3.11 Mf/o Pharmaceuticals, Medical Chemical and Botanical 1.99%
Products
3.12 Mf/o Rubber and Plastic Products 2.30%
3.13 Mf/o other Non-Metallic Mineral Products 3.20%
3.14 Cement, Lime, and Plaster 1.64%
3.15 Mf/o Basic Metals 9.65%
3.16 Mild Steel – Semi Finished Steel 1.27%
3.17 Mf/o Fabricated Metal Products, Except Machinery and 3.15%
Equipment

WPI Basket Weights

PRIMARY ARTICLES
23%

FUEL & POWER

MANUFACTURED 13%
PRODUCTS 64.23%

PRIMARY ARTICLES FUEL & POWER MANUFACTURED PRODUCTS

 Movement Of CPI And WPI In 2018, 2019, 2020, 2021, 2022, 2023 Month-Wise

Year Month CPI (Rural) CPI (Urban) CPI (Combined) WPI

2018 Jan 139.3 134.1 136.9 116
Feb 138.5 134 136.4 116.1
Mar 138.7 134 136.5 116.3
Apr 139.1 134.8 137.1 117.3
May 139.8 135.4 137.8 118.3
Jun 140.5 136.2 138.5 119.1
Jul 141.8 137.5 139.8 119.9
Aug 142.5 138 140.4 120.1
Sep 142.1 138.1 140.2 120.9
Oct 142.2 138.9 140.7 122
Nov 142.4 139 140.8 121.6
Dec 141.9 138 140.1 119.7
2019 Jan 141 138 139.6 119.2
Feb 141 138.6 139.9 119.5
Mar 141.2 139.5 140.4 119.9
Apr 141.7 140.6 141.2 121.1
May 142.4 141.5 142 121.6
Jun 143.6 142.1 142.9 121.5
Jul 144.9 143.3 144.2 121.3
Aug 145.7 144.2 145 121.5
Sep 146.7 144.7 145.8 121.3
Oct 148.3 146 147.2 122
Nov 149.9 147 148.6 122.3
Dec 152.3 148.3 150.4 123
2020 Jan 151.9 148.2 150.2 123.4
Feb 150.4 147.7 149.1 122.2
Mar 149.8 147.3 148.6 120.4
Apr 151.9 150.9 151.4 119.2
May 151.2 150.6 150.9 117.5
Jun 152.7 150.8 151.8 119.3
Jul 154.7 152.9 153.9 121
Aug 155.4 154 154.7 122
Sep 157.5 155.2 156.4 122.9
Oct 159.8 156.7 158.4 123.6
Nov 160.7 156.9 158.9 125.1
Dec 158.5 156 157.3 125.4
2021 Jan 156.8 155.8 156.3 126.5
Feb 156.7 156.5 156.6 128.1
Mar 156.7 156.9 156.8 129.9
Apr 157.6 158 157.8 132
May 161.1 159.5 160.4 132.9
Jun 162.1 160.4 161.3 133.7
Jul 163.2 161.8 162.5 135
Aug 163.6 162.2 162.9 136.2
Sep 164 162.3 163.2 137.4
Oct 166.3 164.6 165.5 140.7
Nov 167.6 165.6 166.7 143.7
Dec 167 165.2 166.2 143.3
2022 Jan 166.4 165 165.7 143.8
 Feb 166.7 165.5 166.1 145.3
ar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr168.7
May Jun Jul166.5
Aug Sep Oct Nov167.7 148.9
170.8 169.2 170.1 152.3
172.5 170.8 171.7 155
173.6 171.4 172.6 155.4
174.3 172.3 173.4 154
175.3 173.1 174.3 153.2
176.4 174.1 175.3 151.9
177.9 175.3 176.7 152.9
177.8 175 176.5 152.5
177.1 174.1 175.7 150.5
2023 177.8 174.9 176.5 150.7
177.9 175.6 176.8 150.9
178 176.3 177.2 151
178.8 177.4 178.1 151.1
179.8 178.2 179.1 149.4
181.9 179.9 181 148.9
187.6 184.7 186.3 152.1
187.6 184.5 186.2 152.5
185.8 182.2 184.1 151.8
187 183.4 185.3 152.1
188.2 184.2 186.3 152.9

CPI and WPI

195

185

175

165

155

145

135

125

115

105
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2018 2019 2020 2021 2022 2023

CPI (Rural) CPI (Urban) CPI (Combined) WPI

Analysis:
 Both CPI and WPI trends were upward throughout the period, signifying sustained inflation.
o Factors like global supply chain disruptions, geopolitical tensions, and fuel price fluctuations could contribute
to this trend.
 CPI (Rural) consistently remained slightly higher than CPI (Urban), highlighting the need for targeted policies to
address rural economic concerns.
 WPI experienced sharper fluctuations compared to CPI.
 2020 saw a significant dip in WPI due to pandemic disruptions.
 While CPI (both Combined and Urban) continues to rise in 2022, WPI has shown a slight dip after peaking in
May. This indicates a potential disconnect between producer and consumer prices.
 2022 and 2023 witnessed a surge in both CPI and WPI, primarily driven by rising fuel prices and global supply
chain disruptions.

GDP Deflators Quarterly/Yearly

Year GDP Deflator

1960 2.4
1961 2.4
1962 2.6
1963 2.8
1964 3
1965 3.3
1966 3.7
1967 4
1968 4.1
1969 4.2
1970 4.3
1971 4.5
1972 5
1973 5.9
1974 6.9
1975 6.8
1976 7.2
1977 7.6
1978 7.8
1979 9
1980 10
1981 11.1
1982 12
1983 13.1
1984 14.1
1985 15.1
1986 16.1
1987 17.6
1988 19.1
1989 20.7
1990 22.9
1991 26.1
1992 28.4
1993 31.2
1994 34.3
1995 37.4
1996 40.3
 1997 42.9
1998 46.3
1999 47.7
2000 49.5
2001 51
2002 52.9
2003 55
2004 58.1
2005 61.4
2006 66.6
2007 71.2
2008 77.7
2009 83.2
2010 92
2011 100
2012 107.9
2013 114.6
2014 118.4
2015 121.1
2016 125.1
2017 130
2018 135.1
2019 138.3
2020 144.9
2021 157.3
2022 170.2

GDP Deflator
180 160
140
120
100
80
60
40
20
0

YEAR

 The GDP deflator has risen steadily over the past six decades, from 2.4 in 1960 to 170.2 in 2022.
 The pace of increase was relatively moderate in the early 2000s, averaging around 2-3% per year.
 Since 2010, the growth rate has accelerated, with an average increase of around 6% per year.
 The final two years, 2021 and 2022, witnessed particularly high inflation, with the deflator rising by 12.3% and
8.2%, respectively.
o Fluctuations in global prices of oil, food, and other commodities impacted India's import costs and
contributed to overall inflation.
 o Disruptions in global supply chains due to factors like pandemics(COVID), geopolitical tensions (Russia-
Ukraine War), and trade wars limited supply and drove prices up.
o Loose monetary policy, characterized by low-interest rates and increased money supply in response to
COVID also contributed to inflationary pressures.
References:
i. https://cpi.mospi.gov.in/TimeSeries_Crosstab.aspx
ii. https://data.worldbank.org/indicator/NY.GDP.DEFL.ZS?end=2022&locations=IN&start=1960&view=chart
iii. https://eaindustry.nic.in/display_data_201112.asp
iv. https://eaindustry.nic.in/pdf_files/cmonthly.pdf
v. https://mospi.gov.in/percentage-share
vi. https://www.mospi.gov.in/sites/default/files/press_release/CPI%20Technical%20Note%20on%20Imputation.pdf