WPI to be Replaced by Producer Price Index (PPI) (Economy)
WPI to be Replaced by Producer Price Index (PPI) (Economy)
Why In News:
The Government of India has announced that the Wholesale Price Index (WPI) will be replaced by a new Producer Price Index (PPI) series starting June 15, 2026.
WPI vs PPI:
Parameter
WPI
(Old)
PPI (New)
Measures
Prices at the wholesale/first point of bulk transaction
Prices at the producer/factory gate - before taxes and distribution
Services coverage
No (goods only)
Yes - includes services sector
Base year
2011-12
Updated base year (2022-23)
Global usage
Limited; UK, India, China historically used WPI
Preferred globally (USA, EU, Japan use PPI)
Taxes
Includes indirect taxes in some categories
Excludes taxes - pure production cost measure
Key Facts for Prelims:
WPI: Measures wholesale price inflation. Released monthly by the Office of the Economic Adviser (OEA) under the Ministry of Commerce & Industry.
GDP Deflator: A broader measure of price changes across the entire economy, used to convert nominal GDP to real GDP.
CPI (Consumer Price Index): Measures retail inflation from the consumer's perspective. Released monthly by the Ministry of Statistics & Programme Implementation (MoSPI). Base year: 2024. CPI (Combined) is the official inflation target measure under India's monetary policy framework (RBI).
Inflation Targeting (RBI): Since 2016, India follows a flexible inflation targeting framework. The CPI inflation target is 4% (+/-2% band). The Monetary Policy Committee (MPC) has 6 members - 3 from RBI, 3 government nominees.