The Government of India has taken an important step towards changing the base year of the Wholesale Price Index (WPI). The government has formed a working group under the chairmanship of NITI Aayog member Ramesh Chand for this change. The main objective of this working group is to change the base year of calculation of WPI from 2011-12 to 2022-23.

Importance of Base Year

In the calculation of WPI, a comparative analysis of the prices of the base year is done. If the base year is revised, it will present a more realistic and appropriate picture of the current price situation in the country. This will help in better implementation of economic plans and policies.

Reviews taking into account structural changes

The main focus of the working group will be on the structural changes in the economy. This group will give suggestions related to the commodity group of WPI and Producer Price Index (PPI). Also, it will review the existing product price collection system and suggest measures to improve it.

Members and contributors

The working group includes representatives from the Reserve Bank of India, Department of Economic Affairs, Ministry of Statistics, Department of Agriculture and other ministries. Apart from this, several prominent economists are also included in the working group as non-official members, including Surjit Bhalla, Shamika Ravi, Dharmakirti Joshi, Nilesh Shah and Indranil Sengupta.

New reports and earlier views

Earlier the plan was to change the base year from 2011-12 to 2017-18, but now it is being considered to make 2022-23 the base year for this change. A report released in June 2021 suggested the inclusion of about 480 new products. This will improve WPI and pricing can be done with more accuracy.

Current Status of Wholesale Price Index (WPI)

Till now, 697 products are used in calculating WPI. These include 117 primary products, 16 fuel and power products, and 564 manufactured products. This change will ensure that price fluctuations of these products can be measured more accurately.

It is worth noting that price revisions are monitored through WPI and Consumer Price Index (CPI). This step is an important step towards making the country's economic indicators more accurate and modern.