WPI to be revised with new price indices; 354 new items to be introduced in the basket

India is all set to change the traditional system of measuring inflation and prices in the market spaces, as the Centre has announced to revise the WPI with a changing base year from 2011-12 to 2022-23. This will include transitioning from WPI to new Producer Price Indices, introducing new compilations of measures. The Office of Economic Advisor, DPIIT, will release the revised series on 15.06.2026 at 12:00 noon. This will also expand the commodity basket to 957 items from 697 with the addition of 354 new items.
New items include solar, wind and nuclear electricity, while crude petroleum and natural gas have been shifted from the Primary Articles category to Fuel and Power.

The revision of the base year of WPI from 2011-12 to 2022-23, with the introduction of new indices, has been approved by the Department of Industries and Internal Trade. This has also been presented earlier by the Technical Advisory Committee on Statistics of Price and Cost of Living (SPCL) and before the National Statistical Commission.

Since WPI is widely used in business contracts to determine price revisions, the government will continue releasing both WPI and PPI for the next five years. This will allow businesses and other users to switch to PPI before WPI is phased out gradually.

Why the Transition?

Considering the recommendations by the IMF, this has been done to match common practices used by all advanced economies. This revision will include new methods like the output producer price index (OPPI), Input producer price index (IPPI) and service producer price index (service PPI), which will help in understanding the price movements of items, both output and input being used in the industry.
The base year has been changed because of the growing economic conditions of the country; advancements in renewable energy like solar and wind are a driving force behind the change.

Key Highlights

• Increase in the number of items: the total number of items increased from 697 to 957
• Considering renewable energy: New sources of energy such as solar and wind have been added to the "electricity " group in addition to nuclear electricity.
• Structure to track energy prices: Placing natural gas and crude petroleum under Fuel and power will make better alignment, as this group already contains fuels like coal, electricity and petroleum products.
• New methodologies of GVO are used for preparing weights in WPI (2022-23); GVO formulates as GV0+Imports-Exports. This is a better way; it holds the producer's perspective and other movements.
• With computation methods, it becomes better to compile indices with chain-based methods.
• 'Targeted Mean Imputation' method has replaced the carry-forward method in the existing WPI.

For experimental purposes, WPI and output PPI are being compiled for May 2026 along with the back series of 37 months between April 2023 and April 2026. The department will publish monthly trial Input PPI for the manufacturing sector to determine the data quality.