PIB – May 14 , 2019


ECONOMY

Index Numbers of Wholesale Price in India

Context

  • A review report for the month of April, 2019 of Index Numbers of Wholesale Price in India (Base: 2011-12=100) is published.
  • According to it the official Wholesale Price Index for ‘All Commodities’ (Base: 2011-12=100) for the month of April, 2019 rose by 0.8 percent to 120.9 (provisional) from 120 (provisional) for the previous month.

What Is a Wholesale Price Index?

  • The Wholesale Price Index (WPI) is the price of a representative basket of wholesale goods.
  • The Wholesale Price Index concentrates on the price of goods traded between corporations, instead of goods purchased by consumers.
  • The purpose of the WPI is to monitor price movements that reflect supply and demand in industry, manufacturing and construction.
  • Usually expressed as a ratio or percentage, the WPI shows the included goods’ average price change and is often seen as one indicator of a country’s level of inflation.
  • In India, the Consumer Price Index (CPI) has been adopted to measure inflation instead of the Wholesale Price Index (WPI).
  • The new series of Wholesale Price Index (WPI) with base 2011-12 is effective from April 2017 in India.
  • The number of items covered in the new series of the WPI has increased from 676 to 697.

How a Wholesale Price Index Works?

  • Wholesale price indexes (WPIs) report monthly to show the average price changes of goods.
  • They then compare the total costs of the goods being considered in one year with the total costs of goods in the base year.
  • The total prices for the base year are equal to 100 on the scale. Prices from another year are compared to that total and expressed as a percentage of change.

Who published it?

  • Wholesale Price Index is published by the Economic Adviser in the Ministry of Commerce and Industry.
  • It is calculated by Office of the Economic Adviser in DIPP (Department of Industrial Policy and Promotion).

 Key Takeaways

  • A wholesale price index measures and tracks the changes in the price of goods before they reach consumers.
  • WPIs, which report monthly to show the average price changes of goods, are usually expressed in ratios or percentages.
  • The purpose of WPI is to monitor price movements that reflect supply and demand in Industries, construction and Manufacturing.
  • A WPI is often seen as one indicator of a country’s level of inflation.

BILATERAL, REGIONAL AND GLOBAL GROUPINGS AND AGREEMENTS

Global Facility for Disaster Reduction and Recovery (GFDRR)

Context

  • India is unanimously chosen as co-chair of the Consultative Group (CG) of Global Facility for Disaster Reduction and Recovery (GFDRR) for the fiscal year 2020.
  • The decision was taken during the CG meeting of GFDRR held in Geneva, Switzerland on the margins of the 6th Session of the Global Platform for Disaster Risk Reduction (GPDRR) 2019.

What is the GFDRR?

  • GFDRR is a global partnership established in 2006 to support developing countries to understand, manage, and ultimately reduce their risk from natural hazards and climate change.
  • Hosted at the World Bank, GFDRR is supported by 37 countries and 11 international organizations, and works with over 400 sub-national, national, regional, and international partners.
  • GFDRR is located in World Bank headquarters in Washington, DC.
  • GFDRR contributes to the implementation of the Sendai Framework for Disaster Risk Reduction by helping countries to integrate disaster risk management and climate change adaptation into development strategies and investment programs and recover from disasters quickly and effectively.

Its missions are

  • To mainstream disaster reduction and climate change adaptation (CCA) in country development strategies.
  • To foster and strengthen global and regional cooperation among various stakeholders under the International Strategy for Disaster Reduction (ISDR) system.

GFDRR and India

  • India became member of CG of GFDRR in 2015 and expressed its interest to co-chair in last meeting of CG held in October 2018.
  • India’s candidature was backed by its consistent progress in disaster risk reduction (DRR) in the country and its initiative to form a coalition on disaster resilient infrastructure.

Way forward

  • This will give the country an opportunity to work with the member countries and organizations of GFDRR with a focused contribution towards advancing the disaster risk reduction agenda during the course of the year.
  • This is the first time that the country has been afforded the opportunity of co-chairing the CG meeting of GFDRR.
  • India would like to pursue a focused agenda and develop synergies with ongoing work streams of GFDRR. Disaster Resilient Infrastructure (DRI) will be a central theme of engagement with the GFDRR partners and stakeholders.

WTO Ministerial Meeting of Developing Countries

Context

  • A WTO Ministerial meeting of Sixteen developing countries and Six Least Developed Countries (LDC) is being hosted by India in New Delhi.
  • The WTO Ministerial Meeting of Developing Countries concluded in New Delhi on 14 May 2019.
  • This is the second mini-ministerial meet of the World Trade Organisation (WTO).
  • The meeting is to discuss the interests of developing and least developed countries in global trade, this informal meet will also focus on the accusation by the U.S. that these economies benefit from exemptions meant for the poorer nations.

What was the purpose of WTO Ministerial meeting?

  • Twelfth WTO Ministerial Conference (MC12) will take place in June 2020 in Kazakhstan.
  • Before WTO MC12 the developing and least develop countries needed to discuss the concerns and issues regarding WTO to put in the meeting.
  • The issues on the deadlock in key areas of negotiations and the impasse in the Appellate Body.
  • The challenges being faced by multilateral rule-based-trading system.
  • Increasing unilateral measures and counter measures by members which threaten the very existence of Dispute Settlement Mechanism of the WTO.
  • To build consensus on how to move forward on the WTO reforms.
  • Outcome of the WTO Ministerial Meeting of Developing Countries

WTO Ministerial meeting participant countries decided unanimously to work collectively to strengthening the WTO to promote development and inclusivity.

  1. The participant countries reaffirm the pre-eminence of the WTO as the global forum for trade rules setting and governance.
  2. The participant countries will work together with all WTO Members to strengthen the WTO, make it more effective and continue to remain relevant to the diverse needs of its Members, in line with objectives of the WTO.
  3. The participant countries urge all WTO Members to engage constructively to address this challenge without any delay in filling the vacancies in the Appellate Body.
  4. The participant countries WTO Members to adopt measures that are compatible with WTO rules to avoid putting the multilateral trading system at risk.
  5. Multilateral avenues, based on consensus, remain the most effective means to achieve inclusive development-oriented outcomes. Members may need to explore different options to address the challenges of contemporary trade realities in a balanced manner.
  6. Special and Differential Treatment is one of the main defining features of the multilateral trading system and is essential to integrating developing Members into global trade.
  7. The participant countries stress the importance of technical assistance and capacity building provided to developing Members, in particular LDCs, including through the Enhanced Integrated Framework, Aid for Trade and other tools.
  8. The process of WTO reform must keep development at its core, promote inclusive growth, and fully take into account the interests and concerns of developing Members, including the specific challenges of graduating LDCs.
  9. WTO rules seek to foster an open and non-discriminatory trade regime. In order to instill confidence among the Members, it is imperative that the Ministerial Conferences of the WTO are organized in a more open, transparent and inclusive manner.
  10. There is a need to provide adequate policy space to the developing Members to support their farmers through correcting the asymmetries and imbalances in this Agreement on priority.
  11. The participant countries to consult on various issues of common interest to developing Members, including comprehensive and effective disciplines on fisheries subsidies with appropriate and effective Special & Differential Treatment provisions for developing Members.
  12. The participant countries reiterate our commitment to work towards strengthening WTO by promoting development and inclusivity for the benefit of all Members.

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