New Delhi, June 2: The Indian government is set to change the base year of the Wholesale Price Index (WPI) to 2022-23. Alongside this, it will launch the Producer Price Index (PPI), marking a significant step towards modernizing and enhancing the accuracy of India’s inflation measurement system.
Additionally, the government has invited media for a briefing on this topic, scheduled for Tuesday. The Chief Economic Advisor of the Department for Promotion of Industry and Internal Trade (DPIIT), Praveen Mahto, will address the gathering.
Saurabh Garg, Secretary of the Ministry of Statistics and Programme Implementation (MoSPI), stated, “We have utilized the WPI 2022-23 data, which has been provided internally, to avoid any revisions in the Industrial Production Index (IIP) figures for April. We expect these figures to be publicly available in the coming weeks.”
He explained that the current WPI series is based on the year 2011-12, which will be updated to 2022-23 in the revised series.
Garg added that even after the new index is launched, changes in output PPI will not be implemented immediately. The government will first assess the stability and reliability of the new series before deciding on its widespread adoption.
He also noted that there is unlikely to be a significant difference between WPI and output PPI in India, as the methodology used for calculating WPI already minimizes discrepancies between the two.
This announcement comes just a day after the statistics ministry released a revised Industrial Production Index (IIP) based on the 2022-23 year.
The ministry indicated that the updated WPI deflator with the new base year has already been utilized for calculating value-based goods.
Earlier this year in February, the government announced that the base year for Gross Domestic Product (GDP) would be updated to 2022-23, the Consumer Price Index (CPI) to 2024, and the IIP also to 2022-23. This is part of a broader modernization of India’s statistical system.
According to the government, “The work of revising the base year of WPI is ongoing. Until the new WPI becomes available, the current WPI will continue to be used as a deflator.”
Furthermore, the ministry plans to include the Producer Price Index (PPI) in the near future.
The PPI measures price changes for goods and services purchased and sold by producers. This will enhance the understanding of price trends at the production level and improve the accuracy of inflation assessments.
Leave a Comment