In a significant reform aimed at modernizing India’s inflation measurement framework, the government has approved the revision of the Wholesale Price Index (WPI) base year from 2011-12 to 2022-23 and the introduction of a comprehensive set of Producer Price Indices (PPIs). The revised statistical framework will come into effect on June 15, 2026, marking a major shift toward globally accepted standards of producer price measurement.
The decision was approved by the competent authority on May 25, 2026, following recommendations from the Technical Advisory Committee on Statistics of Price and Cost of Living and subsequent discussions with the National Statistical Commission. The Office of Economic Adviser under the Department for Promotion of Industry and Internal Trade (DPIIT) will release the new WPI series and associated producer price indices at 12 noon on June 15.
The updated WPI series with base year 2022-23 will replace the existing 2011-12 series. Alongside it, the government will introduce the Output Producer Price Index (OPPI), Trial Input Producer Price Index (IPPI), and Service Producer Price Index (Service PPI) for seven major service sectors. These include banking, securities transactions, insurance, pension fund management, railways, air passenger transport, and telecommunications.
Officials said the transition reflects international best practices and aligns India’s statistical system with recommendations made by the International Monetary Fund (IMF). While WPI will continue to be published for five years after the launch of the revised series to facilitate a smooth transition, it will eventually be discontinued as producer price indices become the primary measure for tracking producer-level inflation.
One of the most notable changes in the revised WPI is the substantial expansion of the commodity basket. The number of items covered has increased from 697 to 957, providing broader representation of economic activities and improving the accuracy of price measurement.
The revised index also incorporates emerging energy sources. Solar and wind power have been included under the electricity category, while nuclear-generated electricity has been added to the basket for the first time. In another structural change, crude petroleum and natural gas have been shifted from the “Primary Articles” category to the “Fuel and Power” group. This reclassification is expected to create a more coherent framework for monitoring energy price movements across the economy.
The methodology used to determine item weights has also undergone a major revision. The new series relies on Gross Value of Output (GVO) to assign weights, replacing the earlier approach based on net traded value. According to officials, GVO offers a more accurate reflection of the economic importance of commodities from a producer’s perspective because it focuses on domestic production rather than trade-adjusted values.
Further improvements have been introduced in the index compilation process. The revised WPI uses a chain-based short-term formulation for calculating elementary indices instead of the long-term formulation adopted in the previous series. Additionally, a new “Targeted Mean Imputation” technique will be used to address missing price data, replacing the carry-forward method used earlier. These changes are expected to improve the reliability and responsiveness of the index.
To ensure continuity between the old and new series, a linking factor has been developed using the ratio of geometric means of monthly indices for the financial year 2024-25. This factor will be available for all commodities as well as major groups.
The new producer price indices have been designed using the Supply and Use Tables of the National Accounts for 2022-23. While WPI, OPPI, and Service PPI will be compiled using basic prices that exclude taxes and trade margins, the Input PPI will be calculated using purchaser prices, reflecting the actual cost incurred by industries when acquiring inputs.
The government will release monthly WPI and Output PPI data beginning with May 2026 figures, along with historical data from April 2023 onwards. Service PPIs will be published quarterly, while the Input PPI for manufacturing will initially be released on an experimental basis to gather stakeholder feedback and assess data quality before full-scale implementation.
Author: Shivam
Shivam Dwivedi is a senior journalist with extensive experience in research-driven journalism, policy communication, and multi-platform storytelling. His areas of interest include international relations, defence, science & technology, education, urban development, agriculture, spirituality, and environmental sustainability. His work focuses on in-depth analysis, public discourse, and impactful narratives across governance and development sectors, with a strong commitment to the Sustainable Development Goals (SDGs). Contact: [email protected]
