So, in our assessment of the inflation situation, we use the new CPI as also the legacy CPIs, but not them alone, 34. This is not to argue that the WPI is flawless. In its present structure, the WPI does not capture the price movement of services. Also, it is a hybrid of consumer and producer price quotes.
For example, the index captures the price of important commodities like milk from the retail markets; not at the producer level. In contrast to CPI, PPI measures price changes from the perspective of the seller. Sellers' and purchasers' prices differ due to government subsidies, sales and excise taxes, and distribution costs.