Revised WPI next FY

The revised wholesale price index (WPI), the most commonly used measure to gauge inflation, is expected to be introduced next fiscal. But it will not include services as had been expected.

The new WPI, with the base of 2001-02, is expected to be finalised by the beginning of the next fiscal. "However, services may have to be dropped as the progress in that area is relatively slow," said experts on the committee set up to revise the WPI.

Generating back-series figures for the services sector was proving to be a problem. "Figures are available for the last two years. But, with the 2001-02 base, at least four years' data are required," they said.

Instead, a separate services index is likely to be developed. This index will be merged with the WPI, when it is revised. A weighted producer price index would also be developed alongside, they added.

The current WPI has a base of 1993-94 and is long due for revision. The commodities basket in the index no longer reflects goods and services used in the economy.

The revised index will include both a larger number of commodities and a larger number of price quotations for each commodity. In addition, the pricing of products made by small-scale enterprises may be included in the new index.

"The current WPI collects data for manufactured products only from large firms. The coverage of smaller firms is very poor. The WPI, therefore, does not reflect what is happening to prices in export sectors like leather and garments," said Abhijit Sen, member, Planning Commission.

He is heading the WPI revision committee. In the new WPI, an attempt will be made to collect data from around 6,000 small firms.