WPI in 2011-12 series will be less volatile: DIPP

The wholesale price index (WPI) in the new series of base year 2011-12 does not include indirect taxes thus decreasing volatility in inflation at wholesale level, officials said on Friday.

"In the new series of WPI, prices used for compilation do not include indirect taxes in order to remove impact of fiscal policy. It will decrease volatility in the WPI data," Department of Industrial Policy and Promotion (DIPP) Secretary Ramesh Abhishek said in a press briefing here as the government revised the base year of wholesale price index (WPI) and index of industrial production (IIP) to 2011-12 from 2004-05.

The practice of not including the indirect taxes in WPI data is in consonance with international practices and is done to capture changes in the economy more effectively, he said.

Also a new WPI Food Index will be compiled to capture the rate of inflation in food items, he said.

WPI, with the new base year, fell to 3.85 per cent for the month of April.

The updated item basket of WPI has 697 items in the new series from the earlier 676.

Chief Statistician of India T.C.A. Ananth, who was also present at the joint briefing, said: "The objective is to converge more in line with the current consumption and production pattern of the country."

The IIP in the new series has a total of 809 items of the manufacturing sector as against 620 items earlier.

IIP data released showed a growth of 2.7 per cent in March under the new series.

--IANS

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