Working Group for Revision of WPI
29, Jun 2019
Prelims level : Economics Mains level : Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.
Why in news?
- The Government of India has decided to constitute a Working Group for the revision of the current series of Wholesale Price Index (Base 2011-12).
- The current series of Wholesale Price Index (WPI) with 2011-12 as base year was introduced in May 2017. Since 2011-12, significant structural changes have taken place in the economy.
- Therefore, it has become necessary to examine the coverage of commodities, weighting diagram and related issues pertaining to the existing series of index numbers of Wholesale Price Index.
- Accordingly, Government has constituted the Working Group for the revision of current series of Wholesale Price Index (Base 2011-12) under Chairmanship of Dr. Ramesh Chand, Member, Niti Aayog
- The Office of Economic Adviser, Department for Promotion of Industry & Internal Trade will be the nodal office for the Working Group and will process the report / recommendation of the Group for further necessary action.
The Terms of Reference of the Working Group:
- To select the most appropriate Base Year for the preparation of a new official series of Index Numbers of Wholesale Price (WPI) and Producer Price Index (PPI) in India.
- To review commodity basket of the current series of WPI and suggest additions / deletions of commodities in the light of structural changes in the economy witnessed since2011-12
- To review the existing system of price collection in particular for manufacturing sector and suggest changes for improvement.
- To decide on the computational methodology to be adopted for monthly WPI/PPI.
- To examine the existing methodology of compilation of PPI approved by Technical Advisory Committee on Series of Prices and Cost of Living and suggest further improvement in compilation and presentation.
- The Working Group may recommend roadmap for switch over from WPI to PPI.
- To examine the method of computing linking factor adopted so far and suggest appropriate change in method of computing linking factor, if necessary.
- To suggest any other improvements as may be necessary for enhancing the reliability of the official series of WPI / PPI.