Merits of Wholesale Price Index
Various advantages of the Wholesale Price Index are as follows:
- It represents the general development or decline of an economy, the causes of which can be discovered by undertaking micro-level analysis.
- Most nations base their 5-year plans on inflation rates determined using the WPI.
- It assists businesses in developing budgets that account for potential inflation.
- The government can develop measures to enhance unproductive sectors and gain knowledge of different sectors to concentrate on and grow upon by comparing the products of various industries.
- Industries can evaluate and compare their performance to that of other products and adopt industry-wide actions to develop and advance.