New Delhi: The Centre is preparing to update the country's inflation measurement system by revising the base year of the Wholesale Price Index (WPI) and introducing a new Producer Price Index (PPI).
The revised WPI series will use 2022-23 as the new base year instead of the current 2011-12 base year. The move is expected to make inflation data more relevant to current economic conditions.
WPI Base Year To Be Updated
The government has scheduled a media briefing on the matter, which will be addressed by DPIIT Principal Economic Adviser Praveen Mahto.
The revision comes as India updates several key economic indicators to reflect changes in production patterns, consumption trends and market structures over the past decade.
According to officials, WPI data based on the 2022-23 series has already been prepared and used internally for statistical calculations.
New PPI To Strengthen Price Tracking
The government also plans to introduce the Producer Price Index (PPI), which tracks changes in prices received and paid by producers for goods and services.
PPI is widely used in many countries as it offers a broader picture of price movements at the production level.
However, officials clarified that the shift from WPI to PPI will not happen immediately.
MoSPI Secretary Saurabh Garg said the government will first study the stability, reliability and performance of the new index before considering its wider adoption.
Limited Difference Expected Between WPI And PPI
Garg noted that the gap between WPI and output-based PPI is unlikely to be very large in India because of the way WPI is currently calculated.
This means businesses, policymakers and analysts may not see major differences in inflation readings when the new index is introduced.
Part Of Wider Statistical Modernisation
The WPI revision is part of a broader effort to modernise India's statistical system.
Recently, the government revised the base year of the Index of Industrial Production (IIP) to 2022-23. The Consumer Price Index (CPI) base year is also being updated to 2024.
Officials said the existing WPI series will continue to be used as a deflator until the revised WPI becomes available for public use.
The introduction of PPI and updated WPI data is expected to improve the accuracy of inflation measurement and provide a better understanding of price trends across the economy.
