Measuring inflation

More needs to be done besides changing WPI base

Economies undergo structural changes over time. The pace of change would naturally be higher in a developing economy like India. Thus, to be able to make policy interventions in time, it is important for policymakers to understand the nature and pace of change. It is with this objective that government departments responsible for collecting data keep refining and improving the way they measure economic activity and prices over time. In this context, as reported by this newspaper last week, the government is in the process of changing the base year for the wholesale price index (WPI) to 2017-18. The current