- Why in news
- On 2 June 2026 the Commerce Ministry announced that the WPI base year is revised from 2011-12 to 2022-23, with new Producer Price Indices. Both will be released on 15 June 2026.
- What it is
- The Wholesale Price Index tracks average price changes of goods at the wholesale stage. It is compiled monthly by the Office of the Economic Adviser, DPIIT, Ministry of Commerce and Industry. A Producer Price Index measures prices received (output) or paid (input) by producers and is the international standard in advanced economies.
- Items
- The number of items in the basket rises from 697 to 957.
- Weights
- Weights now use Gross Value of Output instead of Net Traded Value (GVO + Imports - Exports).
- Energy regrouping
- Crude petroleum and natural gas move from Primary Articles to Fuel and Power. Solar, wind and nuclear power are added under Electricity.
- WPI phase-out
- WPI will be published for five years alongside PPI, then discontinued, to allow users with price escalation clauses to shift.
- Price basis
- WPI, Output PPI and Service PPI use basic price; Input PPI uses purchaser's price.
Don’t confuse with WPI vs CPI: WPI measures wholesale goods prices (DPIIT, Commerce Ministry). CPI measures retail prices faced by consumers (NSO, MoSPI).
Don’t confuse with Output PPI vs Input PPI: Output PPI tracks prices producers receive; Input PPI tracks prices they pay for inputs.
Economy terms and data: 42 Prelims questions since 2013, rising in recent years; they test what a term or instrument means. In Mains, 12 news-triggered questions.
Why it matters
- PPI shows how input cost changes pass through to output prices, aiding inflation analysis.
- A recent base year and wider basket capture the current economic structure, including renewable energy.
- Moving to PPI aligns India with global practice and IMF recommendations.
Problems
- Many contracts use WPI in price escalation clauses, so users must shift to PPI.
- Service PPI covers only seven services, limited by administrative data availability.
- Input PPI is trial and experimental, covering only manufacturing, so data quality is unproven.
Way forward
- Use the five-year overlap for users to migrate contracts from WPI to PPI.
- Add more services to the Service PPI as data becomes available.
- Use stakeholder feedback to improve the Input PPI and extend it beyond manufacturing.
Put in your answer
WPI basket expansion: Items rise from 697 to 957, with solar, wind and nuclear power added.
Phase-out of WPI: WPI will run for five years alongside PPI, then be discontinued.
- 2021Mains GS3 · Q1Explain difference in GDP computing methodology before and after 2015
- 2024Mains GS3 · Q2Causes of persistent food inflation and RBI monetary policy effectiveness
- 2010Prelims Q86Statements on WPI frequency and food weight compared with CPI(IW)
- 2020Prelims Q67Statements on CPI vs WPI food weights, services coverage, and RBI's inflation measure
- 2002Prelims Q59Statements on new WPI series base year and electricity weight
UPSC’s own questions that come close to this issue, from our Prelims and Mains banks.
Prelims practice · Statements
Ours, not from a UPSC paper
Consider the following statements:
- 1.In the revised Wholesale Price Index series with base year 2022-23, weights are derived from Gross Value of Output instead of Net Traded Value.
- 2.Crude petroleum and natural gas have been moved from the 'Fuel and Power' group to the 'Primary Articles' group in the revised series.
- 3.The Input Producer Price Index is compiled using basic prices, like the Output Producer Price Index.
Which of the statements given above is/are correct?
True or false?
1 of 7
Statements the way Prelims prints them. Say first, then see the fact.
1.The revised WPI series has 2022-23 as its base year.
True. Base year revised from 2011-12 to 2022-23.
2.The WPI is compiled and released by the National Statistical Office under the Ministry of Statistics and Programme Implementation.
False. It is compiled by the Office of the Economic Adviser, DPIIT, Ministry of Commerce and Industry.
3.In the new WPI series, weights are derived from Gross Value of Output rather than Net Traded Value.
True. GVO replaces GVO + Imports - Exports.
4.Crude petroleum and natural gas have been moved from the Fuel and Power group to Primary Articles in the new series.
False. They moved from Primary Articles to Fuel and Power.
5.The new WPI basket has 957 items, up from 697.
True. Items rose from 697 to 957.
6.The Input PPI is compiled using basic prices, like the Output PPI.
False. Input PPI uses purchaser's price; the others use basic price.
7.The Service PPI is initially compiled for seven services, including Railways and Telecom, on a quarterly basis.
True. Seven services in phase one; quarterly compilation.
Written by us from the release, not by UPSC; checked by a second model.
Mains practice
10 marks · 150 words
The Commerce Ministry has revised the base year of the Wholesale Price Index from 2011-12 to 2022-23, introduced Producer Price Indices, and decided to discontinue WPI after five years. Discuss the key changes in the new WPI series and the significance of shifting from WPI to PPI for price measurement and economic policy in India. What challenges could arise in this transition?
Worth revising until Prelims 2028: most news questions come within two years of the event.