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."
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.
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%).
• 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.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.