Wholesale Inflation Hits 9.68% in May as Government Launches New WPI Series

New Delhi, June 15: The Ministry of Commerce and Industry has launched a revised Wholesale Price Index (WPI) series, using 2022-23 as the new base year. The ministry reported that wholesale inflation for May stood at 9.68%.

The new WPI series replaces the previous one based on the 2011-12 base year. This change is part of a broader overhaul of the producer price measurement system in the country.

Alongside the revised WPI, the government has also introduced new series for the Output Producer Price Index (OPPI), Trial Input Producer Price Index (IPPI), and the Service Producer Price Index (PPI) for seven services.

According to the ministry, this shift in the producer price index aligns with recommendations from the International Monetary Fund (IMF) and global standards. The WPI series will be published for the next five years to give users ample time to adapt to the new system.

In May, the all-India WPI-based inflation rate was recorded at 9.68% year-on-year, with the index for all commodities rising to 109.9.

In major categories, inflation for primary items increased to 4.99% in May. Meanwhile, the fuel and power category saw inflation soar to nearly 30%, while inflation for manufactured products rose to 7.48% during the same period.

The ministry noted that key contributors to rising wholesale inflation included mineral oils, crude petroleum, natural gas, chemicals, and basic metals.

Additionally, the WPI food index recorded a food inflation rate of 4.49% in May.

The revised series expanded the number of items in the WPI basket from 697 to 957. The new series includes renewable energy sources like solar and wind energy under the electricity category. For the first time, electricity generated from nuclear energy has also been included in this basket.

The government has reclassified crude petroleum and natural gas from primary items to the fuel and energy category.

The revised methodology uses the Gross Value of Output (GVO) to determine the weightage of items. New techniques have been adopted for index preparation and to address situations where prices are unavailable.

The ministry reported that in May, the new Output Producer Price Index (OPPI) for all items was 109.6, while the Trial Input Producer Price Index (IPPI) for the manufacturing sector was recorded at 104.9.