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India to replace the Wholesale Price Index with a Producer Price Index

· 5 min read·Source: The Hindu
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The Ministry of Commerce announced that India will phase out the Wholesale Price Index (WPI) over the next five years and transition to a Producer Price Index (PPI), aligning the country with international statistical practice. As part of the shift, a revised WPI series with an updated base year of 2022-23 (from 2011-12), alongside the first set of Producer Price Indices covering output, input and services prices, will be launched on June 15, 2026. The PPI is intended to give a more accurate and comprehensive picture of producer-level inflation than the WPI, which does not cover services. The new WPI series is expected to be discontinued around 2031, after which the output-based PPI will become the main measure of non-retail inflation. Discussions on replacing the WPI with a PPI have been under consideration for more than two decades.

Key Facts & Details

8 points
  • 1
    India will phase out the Wholesale Price Index (WPI) over five years and move to a Producer Price Index (PPI).
  • 2
    A revised WPI series with base year 2022-23 and the first PPIs launch on June 15, 2026.
  • 3
    The PPI will cover output, input and services prices, unlike the services-blind WPI.
  • 4
    The new WPI series is expected to be discontinued around 2031.
  • 5
    The shift aligns India with globally accepted measures of producer inflation.

Deep Dive

  • +
    The WPI base year is being updated from 2011-12 to 2022-23 to better reflect the current economy.
  • +
    The move toward PPI has been under discussion for more than two decades.
  • +
    PPI data will eventually be used to strip inflation from real growth calculations.
Q

Exam Focus

Which inflation index is India set to replace with a Producer Price Index (PPI)?

Related Topics

Producer Price IndexWholesale Price IndexInflation

Exam Relevance & Angle

Inflation indices are core economy topics for banking, SSC and UPSC exams, and the WPI-to-PPI transition, the new base year and the launch date are exactly the kind of conceptual-plus-factual content examiners build questions around.

Target Exams

SBI POIBPS POIBPS RRB OfficerRBI Grade BNABARD Grade ASSC CGLLIC AAONIACL AOUPSC CSEState PCS

Background & Context

India measures inflation through multiple indices: the Consumer Price Index (CPI), compiled by the National Statistical Office, tracks retail prices and is the benchmark the RBI targets under flexible inflation targeting, while the Wholesale Price Index (WPI), compiled by the Office of the Economic Adviser in the Ministry of Commerce and Industry, measures price changes at the wholesale level. A key limitation of the WPI is that it covers only goods and excludes services, even though services form a large share of a modern economy. A Producer Price Index (PPI), by contrast, measures the average change over time in the selling prices received by domestic producers for their output and can cover both goods and services, making it a more comprehensive gauge of producer-level inflation and the international standard used by most major economies. Updating the base year, in this case to 2022-23, is a periodic exercise to keep the basket of items and their weights representative of the current structure of the economy.

Related GK Concepts

Must Know
Wholesale Price IndexProducer Price IndexConsumer Price IndexBase yearInflation measurement

Test Yourself

1 / 2

India is set to replace which inflation index with a Producer Price Index (PPI)?

Source

The Hindu

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India to replace the Wholesale Price Index with a Producer Price Index — Current Affairs 2026-06-08