UPSC Prelims 2001 Q9: Indian Economy – Inflation & Price Indices
The new series of Wholesale Price Index (WPI) released by the Government of India is with
reference to the base prices of
- (a) 1981 - 82
- (b) 1990 - 91
- (c) 1993 - 94
- (d) 1994 - 95
Answer: (c) 1993 - 94
Explanation
Base year of the new series of the Wholesale Price Index (in 2001)
| WPI series | Base year |
|---|---|
| Series introduced in 2000 | 1993-94 = 100 |
| Previous series | 1981-82 = 100 |
| Next series (2010) | 2004-05 = 100 |
| Current series (2017) | 2011-12 = 100 |
In April 2000 the Office of the Economic Adviser released a new series of the Wholesale Price Index with base year 1993-94, replacing the 1981-82 series. This was the new series when the 2001 paper was set.
Answer: (c) 1993-94.
Why each option is right or wrong
- (a) Incorrect. 1981-82 was the base of the older series.
- (b) Incorrect. 1990-91 was never a WPI base year.
- (c) CORRECT. The new WPI series of 2000 used 1993-94 as base.
- (d) Incorrect. 1994-95 was never a WPI base year.
Key point
WPI base years: 1970-71, 1981-82, 1993-94, 2004-05, 2011-12. WPI is compiled by the Office of the Economic Adviser, DPIIT.
Remember
WPI new series of 2000 = base 1993-94.
Common mistakes
- Choosing 1981-82, the base of the older series.
- Guessing a base year close to 2001 itself.
- Mixing WPI base years with CPI base years.
Exam tip
Remember the WPI base years as a ladder of roughly ten-year steps.
Sources
- Office of the Economic Adviser, DPIIT — Wholesale Price Index: history of base revisions
- Ministry of Finance — Economic Survey 2000-01, chapter on prices