The Office of the Economic Adviser under the Department for Promotion of Industry and Internal Trade will release a revised wholesale price index (WPI) series on June 15 with 2022-23 as the new base year. According to reports from Business Standard, this revision expands the WPI basket from 697 to 957 items and improves methodology by using gross value of output instead of net traded value for preparing weightings. The updated basket will include modern industries and renewable energy sources such as solar and wind energy, making the WPI more relevant to today's economy. As per Mospi Secretary Saurabh Garg, this change addresses the 'C' grade assigned by the IMF last year, which was primarily due to the outdated 2011-12 base year. The government has announced that both WPI and PPI will operate together for five years, with monthly WPI reports continuing and monthly Output PPI reports being released.
Alongside the WPI revision, the Economic Adviser will launch new producer price indices (PPIs), including 'output PPI' and 'trial input PPI' for the manufacturing sector, and 'services PPI', initially covering seven sectors. As reported by Business Standard, these new PPI series are designed to provide more comprehensive coverage of price pressures across different sectors of the economy. The new Producer Price Index will consist of three major components: prices received by producers for their goods and services, inflation in selected service sectors, and input and output price movements. The Input PPI will monitor the cost of raw materials and other inputs used in manufacturing, initially introduced on a trial basis for the manufacturing sector. For the first time, India will track inflation in several important service industries through a dedicated Service PPI, covering banking, telecommunications, and other key sectors. The services PPI will be published quarterly, replacing the previous use of CPI as a proxy for services inflation.
According to Business Standard, this revision comes at a crucial juncture because the Indian economy has been transformed over the past two decades. The transformation has occurred through formalisation push from goods and services tax, by a pandemic that restructured global supply chains, by the rapid scaling up of renewable energy, and by digital services becoming a dominant production category. These changes necessitate updates to several key economic indicators to reflect changes in production patterns, consumption trends, and market structures over the past two decades. As per Mospi Secretary Saurabh Garg, the new PPI will provide 'PPI for services, which we did not have in WPI' and will help fill data gaps in the formal service sector. The inclusion of solar and wind energy in the revised WPI also reflects India's commitment to clean energy and sustainable development, as these sectors become increasingly important contributors to the economy.
Recent GDP data discrepancies have increased from 0.4 in 2023-24 (FY24) to 1.2 in FY26, in real terms, according to Mospi Secretary Saurabh Garg. However, he expects zero discrepancy at the end of the second and final revised estimates with a lag of two years. This improvement is attributed to the introduction of supply-use tables where each supply is getting mapped to a use, providing greater granularity of data than previously available. The new PPI and revised WPI will be integrated into GDP estimates, though Mospi will examine which sectors can be replaced based on the stability and robustness of PPI numbers once five-year data becomes available. The Annual Survey of Incorporated Services Sector Enterprises (ASISSE) is expected to continue till March 2027, with results anticipated by mid-2027. The launch of India Producer Price Index is expected to improve economic analysis by providing a clearer picture of inflation before products reach consumers, helping identify price pressures early and enabling more informed decisions related to growth, inflation, and industrial development.
