Goodbye to WPI! A New Turning Point in the Financial Sector

The Central Government is preparing to provide a more realistic assessment of inflation trends in the Indian economy. As part of this initiative, it plans to gradually phase out the Wholesale Price Index (WPI) over the next five years and replace it with a more comprehensive Producer Price Index (PPI).

The new PPI framework will cover output prices, input prices, and services, offering a broader and more accurate measure of price movements across the production chain. The Department for Promotion of Industry and Internal Trade (DPIIT) will release a revised WPI series with 2022–23 as the new base year on the 15th of this month.

On the same day, DPIIT will also release the new PPI series. The PPI will initially include three components: Output PPI, Experimental Input PPI, and Services PPI. The services basket will cover banking, securities transactions, insurance, pension fund management, railways, passenger air transport, and telecom, with plans to expand coverage further in the future.