Govt set to revise WPI base year, launch Producer Price Index
New Delhi, June 2
The government is set to revise the base year of the Wholesale Price Index to 2022-23 and launch the Producer Price Index, a significant step towards updating India's inflation measurement framework.
In addition, the government has invited the media to a briefing on the matter on Tuesday, which will be addressed by DPIIT Principal Economic Adviser Praveen Mahto.
"We have used WPI 2022-23 data, which has been made available internally to us, so that we do not have to make modifications to the April IIP data, which we expect to be available in the public domain within the next few weeks," MoSPI Secretary Saurabh Garg said.
The current WPI series uses 2011-12 as the base year, while the revised series will shift to 2022-23.
Garg said the transition from WPI to output PPI would not happen immediately even after the launch of the new index, adding that the government would first study the stability and reliability of the new series before adopting it for wider use.
He noted that the divergence between WPI and output PPI in India is not expected to be substantial because of the existing methodology used for WPI calculations.
The development comes a day after the Ministry of Statistics and Programme Implementation (MoSPI), while releasing the Index of Industrial Production (IIP) with the revised 2022-23 base year, said it had already used updated WPI deflators with the new base year for compiling value-reported items in the index.
Earlier in February, the government had said that with the GDP base year being revised to 2022-23, the CPI base year being revised to 2024 and the IIP base year shifting to 2022-23, India's statistical system is undergoing comprehensive modernisation.
"The base year revision of WPI is also in progress. Until the updated WPI becomes available, the existing WPI will continue to be used as a deflator," according to an official statement.
Additionally, MoSPI plans to incorporate the Producer Price Index (PPI) in the near future. PPI measures changes in the prices of goods and services bought and sold by producers, it added.
— IANS
Reader Comments
Good to see the statistical system modernizing. But I hope the government doesn't rush the PPI adoption. We need stability and reliability before switching over. Also, how will this affect the common man's understanding of inflation? The CPI is what matters for household budgets, not WPI. Just saying.
As someone who works in supply chain, WPI revisions directly impact our cost projections. The 2011-12 base year was causing distortions in price indices for raw materials. This shift to 2022-23 should give more accurate readings. But will the new PPI replace WPI entirely in the long run? That'll be interesting.
The mention of PPI being close to WPI in India makes sense because our WPI already includes many producer-level prices. But why are we even discussing PPI if the divergence is minimal? Feels like an unnecessary duplication. Still, any step towards better data is welcome. Ab aankhen khuli rakhenge. 👀
Interesting development. But I'm concerned about the data availability and transparency. The article says WPI data has been made available "internally"—so will the public get access to the revised series soon? Also, what about the impact on GDP deflators? These are critical for economic forecasting. Hope the briefing on Tuesday clarifies things.
Honestly, the average person like me just knows inflation has been high, especially in food items. This base year revision might change the numbers but not our daily lives. Still, good that the government is
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