Consider the following statements: 1. The weightage of food in Consumer Price Index (CPI) is higher than that in Wholesale Price Index (WPI). 2. The WPI does not capture changes in the prices of services, which CPI does. 3. Reserve Bank of India has now adopted WPI as its key measure of inflation and to decide on changing the key policy rates. Which of the statements given above is/are correct?
A.2 only
B.3 only
C.1 and 2 only✓ Correct
D.1, 2 and 3
Explanation
Food has a higher weight in CPI than WPI, and WPI does not include services. However, the RBI uses CPI (not WPI) as its key inflation measure for monetary policy.
💡 Practice unlimited UPSC CSE PYQs + AI-tracked progress on each topic. Sign up free →
Want more UPSC CSE practice?
Free daily 10-Q quiz · adaptive mocks · 4,000+ verified PYQs · AI doubt solver in Hindi + English