Govt to replace WPI with Producer Price Index, new series from June 15

📌 Summary:

• Government will phase out the Wholesale Price Index (WPI) over the next 5 years and roll out a more detailed Producer Price Index (PPI) covering output prices, input prices and services prices
• Aim = a more realistic measure of inflationary trends in the economy by capturing services (absent from current WPI) and input-output cost structures
• DPIIT (Dept for Promotion of Industry and Internal Trade, under Commerce & Industry Ministry) will release a revised WPI series with new base year 2022-23 on June 15, 2026, replacing the existing 2011-12 base
• Announcement made by Praveen Mahto, Principal Economic Adviser, Ministry of Commerce & Industry
• PPI is internationally preferred — used by US, EU, Japan, China; aligns India with IMF/World Bank statistical standards and improves accuracy of GDP deflator

🎯 UPSC Relevance: GS3 — Indian Economy: Inflation measurement, macroeconomic indicators, GDP measurement; statistical reforms. Mains GS3 issues of accuracy & reliability of economic data.

📝 Prelims Facts:

• WPI = Wholesale Price Index, currently has base year 2011-12, released monthly by DPIIT (not by NSO/MoSPI which releases CPI)
• New WPI base year: 2022-23 (effective June 15, 2026)
• PPI will cover three baskets: Output prices, Input prices, Services prices
• WPI vs CPI: WPI excludes services; CPI (released by NSO/MoSPI) is used by RBI for monetary policy headline inflation target (4% ± 2%)
• DPIIT now under Ministry of Commerce & Industry (earlier DIPP)

🔑 Key Term: Producer Price Index (PPI) — Measures the average change over time in the prices received by domestic producers for their output (and prices paid for inputs); captures price pressures at the producer stage before they pass through to wholesale and retail levels.