Consider the following statements : 1. The weightage of food in Consumer Price Index (CPI) is higher than that in Wholesale Price Index (WPI). 2. The WPI does not capture changes in the prices of services, which CPI does. 3. Reserve Bank of India has now adopted WPI as its key measure of inflation and to decide on changing the key policy rates. Which of the statements given above is/are correct ?

1. Statement 1 is correct. The Consumer Price Index (CPI), particularly CPI-Combined, gives a significant weightage to food and beverages (around 45-50%) as it reflects the consumption basket of households. The Wholesale Price Index (WPI) gives a lower weightage to food articles (around 24-25% including manufactured food products) and higher weightage to manufactured goods and fuel. 2. Statement 2 is correct. The WPI tracks the prices of goods at the wholesale level and does not include services. The CPI tracks the retail prices of both goods and services consumed by households. 3. Statement 3 is incorrect. The Reserve Bank of India (RBI) formally adopted the CPI (specifically CPI-Combined) as its key measure of inflation for monetary policy purposes in 2014, following the recommendations of the Urjit Patel Committee. It uses CPI, not WPI, to decide on changing the key policy rates. 4. Therefore, statements 1 and 2 are correct.