Commerce ministry to launch PPI and a revamped WPI series on June 15

The new PPI framework is being built on supply and use tables, which officials said makes it more consistent with national accounts and reduces double counting

A producer price index (PPI) and a revamped wholesale price index (WPI), both with 2022-23 as their base year, are set to be launched on June 15 by the Department for Promotion of Industry and Internal Trade (DPIIT), the Ministry of Commerce and Industry said on Tuesday.

 

The new releases will include a “monthly output PPI (goods)”, a trial “monthly input PPI (goods)”, and a “quarterly services PPI”, while the existing WPI series, with the base year being 2011-12, will be replaced by the new series.

 

The introduction of the PPI is meant to align the system more closely with global best practices and explain how the inflation experienced by producers on input items is passed through to output.

 

 

According to the ministry, output PPI and input PPI provide an opportunity to eliminate double counting in inflation. This is unlike the WPI.

 

“In the long run, you will be in a position to do double deflation,” said Praveen Mahto, principal economic adviser, DPIIT, in a press briefing.

 

The ministry said that, considering the wide usage of the WPI in price-escalation clauses of commercial contracts, the series would be released for five years from the date its revised version came into effect, along with the PPI, and would be discontinued thereafter.

 

“This would give sufficient time to users to switch from the WPI to the PPI,” it added.

 

Mahto said the WPI would remain the official measure of inflation even as the system began a transition to the PPI.

 

He added that the Department of Expenditure, which is under the Ministry of Finance, was expected to soon issue a circular telling users that over the next five years, commercial contracts should gradually shift from the WPI to the PPI.

 

The new WPI series will have 957 items, up from the 697 earlier, and will include solar, wind and nuclear electricity in the electricity group.

 

Crude petroleum and natural gas have been shifted from “primary articles” to “fuel and power” while weightings have been recalculated using the “gross value of output” (GVO) instead of “net traded value”.

 

The series will use chain-based computation and targeted mean imputation for missing prices.

 

The new PPI framework is being built on “supply and use” tables, which, officials have said, makes it more consistent with national accounts and reduces double-counting.

 

For now, the monthly WPI and “output PPI (goods)” will be available for May 2026 on June 15, along with the back series from April 2023 to April 2026. 

 

The WPI, “output PPI (goods)”, and “services PPI” are compiled using basic prices, which exclude net taxes and trade and transport margins, whereas “input PPI” uses purchasers’ prices.

 

The “trial input PPI (goods)” will be published only for manufacturing on an experimental basis from March 2026 onwards, while the “services PPI” for seven services — banking, securities transaction, insurance, pension funds, railways, air passenger, and telecom — will be released quarterly, beginning with the fourth quarter  of 2025-26.

 

For the compilation of estimates of gross domestic product by the Ministry of Statistics and Programme Implementation (Mospi), the official said it would be left to the statistics ministry to decide whether the WPI or PPI should be used as the deflator.