Government has decided to gradually phase out the Wholesale Price Index (WPI) over the next five years and replace it with a comprehensive Producer Price Index (PPI) system.
About Wholesale Price Index (WPI)
- It is a measure of the average change of prices of a fixed set of goods at the first point of bulk sale in a commercial transaction in the domestic market over a given period of time.
- Released by: Office of the Economic Adviser, DPIIT, Ministry of Commerce & Industry.
- Key Changes in the Revised Series:
- Base Year Revised: Updated from 2011-12 to 2022-23.
- Expanded Coverage: Items increased from 697 to 957.
- Energy Basket Rationalisation: Solar, wind, and nuclear energy added under electricity; crude petroleum and natural gas shifted to Fuel & Power.
- Significance of changes: Ensures more realistic assessment of inflationary trends.
About Producer Price Index (PPI)
- It measures the average change in the price a producer receives for his goods/services sold in the domestic market/ exports.
- PPI measured through: Output PPI, Input PPI and Service PPI (compiled on quarterly basis).
Why WPI is being replaced by PPI?
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