New Delhi: The Center on Friday announced the revision of the base year for calculating India’s Wholesale Price Index (IPM) from 2004-05 to 2011-12 as part of an exercise to capture structural changes in the economy and improve Quality, coverage, and representativeness of the indices.
In a written response to a question in Lok Sabha on Friday, Minister of Finance and Corporate Affairs Arjun Ram Meghwal said the WPI base year review has aligned the series with the base year of other macroeconomic indicators, Product Internal (GDP) and Industrial Production Index (IIP).
The revised WPI basket and its weighting structure are in line with the structure of the economy in 2011-12. The number of items in the basket has increased from 676 to 697 and the number of prices has increased from 5482 to 8331.
The new WPI series does not include any indirect taxes. This is in line with international practices and will make the new WPI conceptually closer to the Producer Price Index. (PPI)
Meghwal also stated that article-level aggregates for the new WPI are compiled using the geometric mean rather than the arithmetic mean, to ensure greater accuracy.
The Government has modernized data collection methods through the adoption of international standards and global best practices, such as online submission of data through web portals, use of computer-assisted personal interviewing methods, etc.
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