April wholesale inflation rises 3.85%

April wholesale inflation rises 3.85%
India's April Food WPI rose 1.16%. Pic: IANS
By ZeeBiz WebTeam
Updated: Fri, May 12, 2017
05:15 pm
Mumbai, ZeeBiz WebDesk
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India's wholesale inflation or Wholesale Price Index (WPPI) for the month of April 2017 rose 3.85% as against the same month of last year. 

Data release by the government showed that wholesale inflation in primary articles rose 1.82% while WPI in food articles grew 1.16% as against corresponding period of last year. 

Government said, "The annual rate of inflation, based on monthly WPI, stood at 3.85% (provisional) for the month of April,2017 (over April,2016) as compared to 5.29% (provisional) for the previous month and -1.09% during the corresponding month of the previous year. Build up inflation rate in the financial year so far was -0.18% compared to a build up rate of 1.21% in the corresponding period of the previous year."

source: tradingeconomics.com

Moreover, Ministry of Commerce & Industry said that the base year for calculation of WPI is now 2011-12 in place of 2004-05 earlier. 

The ministry said, "The  Government  periodically  reviews and  revises the  base year  of  the macroeconomic indicators as aregular exercise to capture structural changes in the economy and improve the quality, coverage andrepresentativeness of the indices. In  this direction, the base year  of All-India WPI has been revised  from  2004-05 to  2011-12."

The Wholesale Price Index (WPI) series in India has undergone six revisions in 1952-53, 1961-62, 1970-71,1981-82, 1993-94 and 2004-05 so far. The current series is the seventh revision.

Key highlights: 

In the revised series, WPI will continue to constitute three Major Groups namely  Primary  Articles, Fuel  &  Power  and  Manufactured Products. Highlights  of  the  changes introduced in the  new series aresummarized below:

•        Updated  item  basket and  weighting structure conforming to  the structure of economy in 2011-12.

•        Increase in number of items from 676 to 697.  In all 199 new items have been added and 146 old itemshave been dropped.

•         The new series is  more representative with increase in number of quotations from 5482 to 8331, anincrease by 2849 quotations (52%).

 

New Features

•        In the new series of WPI, prices used for compilation do not include indirect taxes in  order  to  remove  impact  of  fiscal policy.  This  is  in consonance  with  international practices and  will   make  the  new  WPI conceptually closer to ‘Producer Price Index’.

•        A new “WPI Food Index” will be compiled to capture the rate of inflation in food items.

•        Seasonality of fruits and vegetables has been updated to account for more months as these are nowavailable for longer duration.

•        Item level aggregates for new WPI are compiled  using Geometric Mean (GM) following internationalbest practice and as is currently used for compilation of All India CPI.

•        A high level Technical Review Committee has been set up for the first time to carry out dynamic reviewprocess in order to keep pace with the changing structure of the economy.

 

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