Govt mulls producer price index

The government is working on producer price index (PPI). It will also expand the new CPI by expanding the data collection sample size, which is 1,181 villages now.

“This year post offices and postman were involved in collection of data, but we are also planning to include gram panchayats and gram sabhas in collection of the data,” Minister of State for Statistics and Programme Implementation Srikant Jena told Business Standard.

He said the fact that the difference between the WPI and the new CPI is just one percentage point shows that the collection of data has been authentic. On the PPI, the minister said the proposal is with the Planning Commission who has to approve it for the launch.

“Over a period of time, PPI will be linked to CPI,” Jena said.

In the coming months, Jena said that the new CPI will be expanded to improve its coverage.

World over, PPI or CPI is used as a barometer for price movements, instead of wholesale price index, which is still a yardstick for inflation in India.