How inflation is calculated in India

In the previous article we discussed about what is Inflation. Now we would like to cover how inflation is calculated in India. India uses Wholesale Price Index (WPI) to calculate inflation.
Wholesale Price Index measures the average of the changes of goods and services price on the basis of wholesale price. Presently 435 commodities price level is being tracked through whole sale price index in India. It is also the price index which is available on a weekly basis with the shortest possible time lag of only two weeks. India considers 1993-94 financial year as base year for present WPI index calculation.
The 435 commodities are divided into different groups & sub groups. The list of 435 commodities can be found here. Each commodity has some weightage in the WPI index. Below are the weightages of commodities group wise:1. Primary Articles (weightage: 22.02525%)
2. Fuel, Power, Light & Lubricants (weightage: 14.22624%)
3. Manufactured Products (weightage: 63.74851%)
The primary articles group consists of following sub groups:  Food articles, non food articles and minerals.
The ‘Manufactured Products’ group consists of following sub groups: Food Products, Beverages, Tobacco & Tobacco Products, Textiles, Wood & Wood Products, Paper & Paper Products, Leather & Leather Products, Rubber & Plastic Products, Chemicals & Chemical Products, and Non-Metallic Mineral Products, Basic Metals. Alloys & Metals Products, Machinery & Machine Tools, Transport Equipments &Parts, Other Misc. Manufacturing Industries.
The weightage of each group/subgroup of commodities in WPI can be found here. There is another method for claculation of inflation, it is ‘Consumer Price Index (CPI)’ . Presently most of the developed countries including US, UK & Japan are using CPI method.