how to calculate WPI ?

WPI or the the wholesale price index is calculated by taking monthly price indexes of 676 items. It is calculated on a base year, where the base year prices are assumed to be 100.

Suppose, price of wheat in 1970= Rs.4.50/kg and in 1980 = Rs.5.60/kg.

Now,
$$\begin{gathered} WPI for wheat in 1980 = \frac{Price of wheat in 1980 - Price of wheat in 1970}{Price of wheat in 1970}\times 100 \\ = \frac{5.60 - 4.50 }{4.50}\times 100 \\ = 24.44 \end{gathered}$$
 

Since, the WPI for the base year= 100, WPI for 1980 = 100 + 24.44 = 124.44

Similarly, WPI is calculated for the remaining 675 commodities. Then the weighted average of the individual WPI's is used to estimate the overall WPI.