*Nadal and the WPI – The Hindu BusinessLine

lipped from: https://www.thehindubusinessline.com/opinion/nadal-and-the-wpi/article65508257.ece

Both have breached the 14 mark. The parallels don’t end there

What does Rafael Nadal have in common with the Wholesale Price Index (WPI)? A lot! For starters, both have crossed the 14 mark, the former at Roland Garros, and the latter in India. Both have huge teams backing them to move away from 14 — errr, albeit in opposite directions. Aggressive Serbians put both into a tizzy! Fortunately for Nadal fans and unfortunately for Indians, both look fairly unstoppable at 14.

But that’s not all. The WPI is an index number that tracks the movement of prices of goods traded in bulk by wholesale businesses to other businesses. The index is released by the Ministry of Commerce and Industry monthly. It categorises commodities into three main classes: (i) primary articles, (ii) fuel and power, and (iii) manufactured articles. Primary articles are further sub-divided into food and non-food categories. Food inflation is important enough to be tracked and published separately. The fuel and power group contains petrol, diesel and LPG. The manufactured goods group contains a variety of products such as paper, sugar, fats, textiles and semi-trailers and rubber products. The inflation averaged across the three classes should give the overall WPI inflation in India.

Weights assigned

However, a simple average will not suffice! If the transaction value of manufactured articles is, say, double that of primary articles, then inflation in manufactured articles would pinch the industry lot more. The WPI inflation has to reflect this reality. Hence, each of the classes within the index is given a ‘weight’ based on the net traded value of the item in the base year i.e., 2011-12. For the WPI, the primary, fuel and manufactured groups have a weight of 22.6 per cent, 13 per cent and 64 per cent respectively. The overall inflation is calculated as a weighted average of inflation from all of the classes. In March 2022, when the WPI breached the 14 per cent mark, inflation of 34.52 per cent in the fuel and power group was the major trouble-maker. Primary goods inflation was relatively calm at 15.54 per cent. Rafael Nadal too has a WPI – a Winner Potential Index. This index number tracks the potential that Nadal can win against any other opponents in a Grand Slam final at Roland Garros. The index, never released in the public domain, is a closely guarded number within Team Nadal. The index categorises opponents into three main classes: (i) primary challengers, (ii) muscle and power, and (iii) miscellaneous threats.

The primary group is further sub-divided into pure brilliance and Roger Federer. Federer is important enough to be tracked separately. ‘When Federer has these patches of utter brilliance, the only thing you can do is try and stay calm, wait for the storm to pass. There is not much you can do when the best player in history is seeing the ball as big as a football and hitting it with power, confidence, and laser accuracy.’

The muscle and power group contains Novak Djokovich. The wily Serb flexes brain muscles as quickly as the rest of his body. ‘He is a machine. He’s doing very well mentally everything’ . The miscellaneous group contains a variety of players such as Puerta, Söderling, Ferrer, Thiem, StanWawrinka and Ruud. The wins averaged across the three classes should give the overall winning potential for Nadal at Roland Garros.

However, a simple average will not suffice! If a win against Roger Federer, say, requires double the effort and concentration and creates (considerably more than) double the cheer as compared to winning against another player, then this win would mean a lot more to Nadal. The WPI has to reflect this reality. Hence, each of the classes within the index is given a ‘weight’ based on the number of wins against the player as a proportion of total wins (14) till the current year i.e,. 2022-23. Of the 14 wins of Nadal at the Roland Garros finals, four are against Federer, three against Djokovich and seven against the others. Thus, for Nadal’s WPI, the primary, muscle power and miscellaneous threats have a weight of 28 per cent, 21 per cent and 51 per cent respectively. The overall WPI is calculated as a weighted average of wins from all of the classes.

In 2022, it was Novak in the muscle power group who was seen to be the major trouble-maker at quarter finals. Challenges from the primary group were relatively calm, with Federer not playing in the French Open this year at all.

Forget the Russian conflict. Don’t worry about oil. Don’t even think about wheat. There are still two more Grand Slams left in this year’s season. Nadal is in top form. The RBI better watch out.

The writer is a brave economist trying to laugh against the odds

Published on June 08, 2022

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