The government is working on the process of enlarging the commodity basket of Wholesale Price Index (WPI) for calculating inflation, and the new series will have 2004-05 as the base year instead of the currently used 1993-94, the Parliament was informed today.
The process has been undertaken to bring the index more in tune with the economic changes in the country, Minister of State for Finance Namo Narain Meena said in a written reply to the Rajya Sabha.
"The government has initiated the process for revising the base year of wholesale price inflation (WPI) from 1993-94 to 2004-05 together with an enlargement of the commodity basket and the number of respondents to better reflect the structural changes in the economy," he said.
Meena added that the commodity basket for the new series of WPI will involve inclusion or substitution of new items based on their importance in the economic transactions in the new base year.
Senior government sources had indicated earlier that the new index could be rolled out from this month itself.
They had said the new WPI basket will have over 670 products including LCD TVs, mobile phones, and packaged drinking water among others, and it will exclude obsolete items like typewriters and VCRs.
The index, with 2004-05 as the base year, will have 241 new items and is expected to provide a more realistic picture of price rise and its impact on the common man. Currently, there are 435 items in the WPI basket.
The wholesale price inflation is at present calculated with 1993-94 as the base year. The government had earlier revised the base year for WPI in 1952-53, 1961-62, 1970-71, 1981-82 and 1993-94.
