WPI Base Year Revised to 2022–23 and Producer Price Index (PPI)

Which institution approved the revision of the Wholesale Price Index (WPI) Base Year from 2011–12 to 2022–23?

The Office of Economic Adviser (OEA), Department for Promotion of Industry and Internal Trade (DPIIT), approved the revision of the WPI Base Year from 2011–12 to 2022–23.

What is the new Base Year of the revised Wholesale Price Index (WPI)?

The revised WPI has 2022–23 as its Base Year, replacing the 2011–12 series.

When was the revised WPI Base Year approved?

The revised WPI Base Year was approved on 25 May 2026.

When was the revised WPI and PPI framework scheduled to be released?

The revised WPI and PPI series were scheduled for release on 15 June 2026 at 12 noon.

What major change accompanies the revision of the WPI Base Year?

The revision of the WPI Base Year to 2022–23 is accompanied by the introduction of the Producer Price Index (PPI) framework, with both WPI and PPI running together during a transition period.

How many items are included in the revised WPI basket compared with the earlier basket?

The revised WPI basket expands from 697 items to 957 items.

Why was the WPI basket expanded from 697 to 957 items?

The basket was expanded to better reflect the contemporary structure of India's production and economic activity and to improve the representativeness of wholesale price measurement.

Which new energy sources are included under the Electricity group in the revised WPI?

Solar, wind and nuclear electricity are incorporated into the Electricity group in the revised WPI.

What major reclassification was made regarding crude petroleum and natural gas in the revised WPI?

Crude petroleum and natural gas were shifted/reclassified into the Fuel and Power group.

What methodological approach is used for missing price data in the revised WPI?

The revised WPI uses a chain-based computation approach and Targeted Mean Imputation for missing price data.

What is the purpose of Targeted Mean Imputation in the revised WPI?

Targeted Mean Imputation is used to estimate missing price observations so that gaps in the price data do not disrupt the construction of the index.

What is the transition plan between WPI and PPI?

WPI will continue to be released alongside PPI for four years during the transition period, after which WPI is planned to be discontinued.

Why will WPI continue alongside PPI for four years?

The transition period allows India to gradually move from WPI to PPI while maintaining continuity of price statistics and aligning the system with international recommendations and practices.

What international institutions' recommendations and global practices support the transition from WPI to PPI?

The transition is aligned with International Monetary Fund (IMF) recommendations and global best practices followed by advanced economies.

What is inflation?

Inflation is a sustained rise in the general price level of goods and services, accompanied by a corresponding decline in the purchasing power of money.

What is Creeping Inflation?

Creeping Inflation is a mild or moderate form of inflation in which the general price level rises persistently at a single-digit annual rate.

What is Galloping Inflation?

Galloping Inflation occurs when inflation accelerates substantially, generally reaching double or triple digits and ranging approximately from 20% to 200% annually in the material.

What is Hyperinflation?

Hyperinflation is an extreme form of inflation in which prices rise extraordinarily rapidly, potentially reaching extremely high annual rates; Germany's experience in the 1920s is a classic historical example.

What is Core Inflation?

Core inflation measures changes in the prices of goods and services while excluding volatile food and fuel/energy items, making it useful for identifying underlying inflationary pressures.

What is Headline Inflation?

Headline inflation measures the overall change in prices, including food and energy as well as other goods and services.

What is the relationship between Core Inflation and Headline Inflation?

Core inflation excludes volatile food and fuel items from headline inflation; the material expresses the relationship as Core = Headline minus Food and Fuel.

What is Stagflation?

Stagflation is the simultaneous occurrence of inflation, unemployment and economic stagnation or recession, making it a particularly difficult economic condition to manage.

What is Deflation?

Deflation is a sustained decline in the general price level, meaning prices fall and the real purchasing power of money increases; prolonged deflation can contribute to economic recession.

What is Disinflation?

Disinflation occurs when the inflation rate decreases, meaning prices may still be rising but at a progressively slower rate.

What is Reflation?

Reflation refers to deliberately increasing inflation after a period of deflation, usually through expansionary measures such as increased government spending and lower interest rates to stimulate economic activity.

What is Skewflation?

Skewflation describes an uneven spread of inflation across different sectors, where some sectors experience high inflation, others little or none, and some may even experience deflation simultaneously.

What is Greedflation?

Greedflation refers to a situation where corporations are alleged to increase prices beyond what is necessary to cover higher costs, potentially increasing profit margins.

What is Shrinkflation?

Shrinkflation occurs when producers reduce the quantity or size of a product while keeping its sticker price unchanged, such as reducing a 2-litre product to 1.75 litres for the same price.

What is the Wholesale Price Index (WPI)?

WPI is a goods-based macroeconomic price index that measures the average change in prices of goods traded in bulk at the wholesale level.

At what level does WPI measure prices?

WPI measures prices at the wholesale or producer level and therefore primarily reflects supply-side price pressures rather than prices paid by final consumers.

Does WPI include services?

No. WPI is a goods-based index and excludes services such as healthcare, education and telecommunications.

What is the Base Year and index value used in the revised WPI?

The revised WPI uses 2022–23 as its Base Year and assigns the Base Year an index value of 100, against which subsequent price changes are measured.

What are the three major groups of commodities in the WPI?

The three major WPI groups are Manufactured Products, Primary Articles, and Fuel & Power.

What does the Manufactured Products group of WPI include?

Manufactured Products carry the highest weight in the WPI and include processed foods, textiles, chemicals, machinery, metals and other manufactured goods.

What does the Primary Articles group of WPI include?

Primary Articles include raw and unprocessed items such as food grains, vegetables, oilseeds, minerals and other primary commodities.

What does the Fuel & Power group of WPI include?

Fuel & Power covers energy products including coal, petroleum products, natural gas and electricity.

Why is WPI important for the Indian economy?

WPI is used in price-escalation clauses for long-term contracts and infrastructure projects, helps the government formulate fiscal and trade measures, and is used as a GDP deflator for converting nominal GDP into real GDP.

What is the Producer Price Index (PPI)?

PPI measures the average change over time in the prices received by domestic producers for goods and services at the point before products reach retail consumers.

How does PPI differ from Consumer Price Index (CPI)?

CPI measures prices paid by consumers at the retail level, whereas PPI measures prices received by producers before goods and services reach consumers.

What does Input PPI measure?

Input PPI measures changes in the prices of raw materials, goods and services purchased by industries for manufacturing final products, using the Purchaser's Price.

What does Output PPI measure?

Output PPI measures changes in the prices that industries receive for the final goods and services they produce, compiled on the basis of Basic Price.

What does Service PPI measure?

Service PPI measures price changes in the services sector, which covers over 50% of India's GDP but was excluded entirely from WPI.

Which services are included in the first phase of Service PPI?

The first phase of Service PPI covers Banking, Securities Transactions, Insurance, Management of Pension Funds, Railways, Air Passenger services and Telecom.

How frequently is Service PPI compiled?

Service PPI is compiled quarterly on the basis of Basic Price, with additional services planned for inclusion in subsequent phases.

What are the three pillars/components of the PPI framework?

The three main components are Input PPI, Output PPI and Service PPI.

What are the key characteristics of PPI?

PPI measures prices at the first point of sale when goods leave the factory or producer; uses Basic Price for output and service PPI; excludes indirect taxes, trade margins and transportation costs from Basic Price; and covers both goods and services.

Why is India transitioning from WPI to PPI?

The transition eliminates measurement distortions in WPI, improves understanding of price transmission, includes services, aligns India's price statistics with international standards and provides a better producer-level measure of inflation.

Why can WPI create a distortion because of indirect taxes?

Because WPI incorporates indirect taxes in its price calculations, a government decision to raise taxes can make WPI rise even when the underlying production cost has not changed.

Why can imported goods create a distortion in WPI?

WPI includes prices of imported goods at the wholesale level, meaning imported inflation can enter the domestic price index, whereas PPI focuses on domestic production.

What is the key difference between WPI and PPI regarding services?

WPI is a goods-based index and excludes services, while PPI covers both goods and services, including sectors such as banking, telecom, aviation and insurance.

How do Input PPI and Output PPI together improve understanding of price transmission?

Input PPI tracks changes in the prices producers pay for inputs, while Output PPI tracks prices producers receive for final products. Comparing them helps understand how input-cost changes are transmitted into final-output prices.

What valuation principle applies to Output PPI and Service PPI?

Output PPI and Service PPI are based on Basic Price, which excludes indirect taxes such as GST, trade margins and transportation costs.

What valuation principle applies to Input PPI?

Input PPI uses Purchaser's Price, which reflects the price paid by industries for inputs.

What is the key difference between CPI, WPI and PPI?

CPI measures prices paid by consumers at the retail level; WPI measures wholesale prices of goods; and PPI measures prices received by producers at the factory-gate/producer level and includes both goods and services.

Who releases CPI, WPI and PPI respectively?

CPI is released by the National Statistical Office (NSO), Ministry of Statistics and Programme Implementation; WPI is released by the Office of Economic Adviser (OEA), DPIIT; and PPI is also associated with the Office of Economic Adviser, DPIIT.

What are the key structural differences between CPI, WPI and PPI?

CPI is a retail-level index covering goods and services and imports; WPI is a wholesale-level goods-only index; and PPI is a factory-gate/producer-level index covering both goods and services, with Input and Output PPI components.

Which PPI component is being published experimentally for the manufacturing sector?

Input PPI (IPPI) is being published experimentally for the manufacturing sector from March 2026.

Which PPI index is compiled quarterly?

Service PPI is compiled quarterly.

What is OPPI in the transition framework?

OPPI refers to Output PPI and is part of the producer-price framework being introduced alongside the revised WPI.

What is the linking factor mentioned for the revised WPI series?

A linking factor is computed for FY 2024–25 to connect the revised 2022–23-based WPI series with the earlier series and maintain continuity between the two series.

What change has been made to WPI weights in the revised series?

The revised WPI uses weights based on Gross Value of Output (GVO), replacing the earlier traded-value-based approach.

What pricing distinction is important for the revised WPI and PPI framework?

The framework distinguishes among Basic Price, Purchaser's Price and other price concepts. Output PPI and Service PPI use Basic Price, while Input PPI uses Purchaser's Price.

What is the overall significance of introducing PPI alongside the revised WPI?

The PPI framework provides a more modern producer-level measure of inflation, covers both goods and services, improves understanding of price transmission, reduces distortions from taxes and imports, and brings India's price statistics closer to international standards while WPI is gradually phased out.