• The government of India has set up a Working Group to revise the base year of the Wholesale Price Index (WPI) and also suggest a road map to gradually transit from the existing WPI to the Producer Price Index.
• The base year of the present WPI is 2011-12 and it is to be switched to 2022-23.

WPI and CPI and PPI

WPI

• The WPI I captures the average wholesale prices of goods. It includes only basic prices and does not include taxes, rebate/trade discounts, transport, and other charges.
• It is also called a producer-level index. 
• The WPI includes only goods and services that are not included.
• It is used as a GDP deflator to calculate real GDP from nominal GDP.
• The WPI data is released monthly by the DIIPT, Union Ministry of Commerce and Industry.

Consumer Price Index (CPI)

• CPI is also called retail inflation. 
• It includes the average price of the goods and services used by the consumers. 
• The CPI is used by the government/Reserve Bank of India to target inflation, wage revision, dearness allowances, etc.
• The CPI data is released monthly by the National Statistic Office (NSO), Union Ministry of Statistics, and Programme Implementation.

Proposed Producer Price Index (PPI)

• PPI will measure wholesale prices of goods and services by tracking prices at different stages of production.
• The PPI will also include the service sector which is a major part of the Indian economy and is not included in calculating WPI.
• In most of the developed countries, the PPI has been replaced as per the internationally agreed System of National Accounts (SNA) to compile measures of economic activity.
• The Indian government has been trying to find a suitable methodology to construct the P Date: Current Affairs - 04-01-2025
  Category: National

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