The WPI and the CPI numbers are inconsistent...

In a low demand, spending and growth world which is evident in low domestic inflation and oil prices (only moving higher after supply cuts) we expect the monetary-policy to be accommodative and increase growth expectations... Governor could tighten anytime when inflation mounts, but low inflation must follow rate cuts to increase falling growth estimates, growth is an underlying objective of the monetary policy besides price-stability and full-employment... Changing inflation index too frequently might create uncertainty for investors... The government is committed to improve the supply-side and lower inflation through selective controlling the prices of important commodities... Lower borrowing cost is important for investment and supply...

Nonetheless the CPI in January at 3.2 % is lower than the WPI above 5% raises question about the supply management when WPI index is expected to be lower than CPI i.e. Wholesale-Prices and Consumer-Prices, respectively. The major element that increases the differences between WPI and CPI is cost incurred on wages on transmit and the transport costs. Paul Krugman shows that lower transport costs lead to lower-prices and increase demand and growth and the population or the labour-force increases around markets and industrial centers... Therefore, we might expect that that higher transport cost would increase CPI more than WPI and not the other way, WPI more than CPI. However, the different weightage of same things might in both of the indices show difference, but that could not reverse the argument the common understanding about the market that CPI would in most of the cases be higher than the WPI because of the cost of replacement from the wholesale market to the retail market. In short, we may say that the WPI and the CPI numbers are inconsistent.

As far as we know, WPI and CPI have same goods and services in the indices, but could have different weightage and Core-WPI has same things like WPI except that it excludes volatile food and fuel prices whereas Core-CPI is equivalent to CPI excluding food and fuel prices...