India to unveil revamped WPI, producer price indices on 15 June
New Delhi: The government will this month roll out a revised Wholesale Price Index (WPI) with a new 2022-23 base year and introduce a new
New Delhi: The government will this month roll out a revised Wholesale Price Index (WPI) with a new 2022-23 base year and introduce a new set of Producer Price Indices (PPIs), marking a major overhaul of how producer inflation is measured in India. The changes expand the commodity basket, update the weighting and calculation methodology, and align India's inflation framework more closely with global practices. According to a statement by the department for promotion of industry and internal trade (DPIIT) on Tuesday, the revised WPI series with base year 2022-23 will replace the 2011-12 series. The Office of the Economic Adviser will release the new series on 15 June. Alongside the revised WPI, the government will also release a new Output Producer Price Index (OPPI), a trial Input Producer Price Index (IPPI) and Service Producer Price Indices for seven services—banking, securities transactions, insurance, management of pension funds, railways, air passenger transport and telecom. Also Read | Centre plans monsoon push for capital markets, housing finance reforms The government said the existing WPI would continue to be published for five years alongside PPIs because of its widespread use in price-escalation clauses.
Thereafter, it will be discontinued, allowing users time to transition to the PPI framework. "The transition from WPI to PPI is in alignment with the global best practices adopted by advanced economies and the recommendations of the International Monetary Fund (IMF)," the statement said. The revision and compilation methodology were approved by the competent authority on 25 May. The methodology was earlier cleared by the Technical Advisory Committee on Statistics of Price and Cost of Living and subsequently presented before the Statistical Commission. What changes Under the revised WPI series, the number of commodities covered has increased to 957 from 697 earlier. The basket has also been expanded to include solar, wind and nuclear electricity under the electricity group. In another structural change, crude petroleum and natural gas have been shifted from the ‘Primary Articles’ category to the ‘Fuel and Power’ group. The government said this rejig would improve alignment with other major fuels such as coal, electricity and petroleum products. The revised index wil also introduce changes in the methodology.
Weights will now be based on gross value of output (GVO), replacing the net traded value approach used in the 2011-12 series. According to the government, GVO-based weights better reflect the economic significance of commodities from a producer perspective. Elementary indices will be compiled using a short-term chain-based formulation instead of the long-term formulation used earlier. For missing price data, the new series will adopt a ‘Targeted Mean Imputation’ method, replacing the existing carry-forward approach. Also Read | Govt asks private banks to fast-track onboarding to insurance portal Jansuraksha The government has computed a linking factor based on the ratio of geometric means of the 12-month indices of the old and new WPI series for 2024-25. The linking factor will be available for all commodities and major groups. The revised WPI and Output PPI will be released monthly beginning with provisional data for May 2026, along with a back series from April 2023 to April 2026. The trial Input PPI for manufacturing will be published monthly on an experimental basis from March 2026 onwards to facilitate data-quality assessment and stakeholder feedback.
Service PPIs, which will be released quarterly, will be published for the fourth quarter of 2025-26, along with back-series data from the first quarter of 2023-24 to the third quarter of 2025-26. Also Read | RBI will curb undue forex speculation: Governor Malhotra The government said weights for Output PPI and Input PPI have been derived using the Supply Table and Use Table, respectively, from the 2022-23 Supply and Use Tables of the Accounts. While WPI, Output PPI and Service PPI are being compiled on the basis of basic prices, excluding net taxes and trade and transport margins, the Input PPI will be compiled using purchasers' prices as industries procure inputs from the market.
The BriefWire