The Centre on Friday announced the revision of the base year to calculate the All-India Wholesale Price Index (WPI) from 2004-05 to 2011-12, as part of an exercise to capture structural changes in the economy and to improve the quality, coverage and representativeness of the indices.
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In a written reply to a question in Lok Sabha on Friday, Arjun Ram Meghwal, Minister of State for Finance and Corporate Affairs stated that the base year revision of the WPI has aligned the series with the base year of other macroeconomic indicators such as the Gross Domestic Product (GDP) and Index of Industrial Production (IIP).
The revised basket of the WPI and its weighting structure conform to the structure of economy in 2011-12. The number of items in the basket has increased from 676 to 697 and the number of price quotations has increased from 5482 to 8331.
The new series of the WPI does not include indirect taxes. This is in consonance with international practices and will make the new WPI conceptually closer to the Producer Price Index. (PPI)
Meghwal also stated that item level aggregates for the new WPI are compiled using Geometric Mean instead of Arithmetic Mean, to ensure greater accuracy.
The Government has now modernised the data collection methods by adopting international norms and global best practices such as submission of data online through web portals, use of computer assisted personal interviewing methods and so on.