Why in the news
The Centre decided to retire the Wholesale Price Index step by step over five years, with the Producer Price Index taking its place. DPIIT, under the Ministry of Commerce and Industry, begins publishing both a refreshed WPI and the new PPI from 15 June 2026.
Key facts
- Transition period: five years for WPI to be phased out.
- Revised WPI base year: 2022-23, replacing 2011-12.
- New PPI sub-indices: Output PPI, Trial Input PPI and Services PPI.
- Services PPI, phase 1: seven sectors, namely telecom, railways, air passenger transport, banking, insurance, securities transactions and pension fund management.
- Releasing body: DPIIT for both WPI and PPI.
WPI at a glance
| Feature | Detail |
|---|
| Measures | Average change in prices of goods traded in bulk at wholesale level; India’s oldest price index |
| Issued by | Office of the Economic Adviser, DPIIT |
| Base year | 2011-12 now; 2022-23 in the revised series |
| Frequency | Monthly, around the 14th |
| Coverage | Goods only; 697 items in the current series |
| WPI group | Weight (2011-12 series) |
|---|
| Manufactured Products (largest) | 64.23% |
| Primary Articles | 22.62% |
| Fuel and Power | 13.15% |
Limitations of WPI
- Leaves out services, though services make up over 50% of GDP.
- Captures bulk wholesale prices rather than prices at the producer’s gate.
- Does not directly reflect inflation felt by consumers.
- Cannot fully trace input-to-output price pass-through.
About PPI
PPI tracks the average change in prices domestic producers receive for goods and services at the producer’s gate, before trade margins, transport costs or taxes are added.
- Output PPI: prices of goods produced and sold.
- Trial Input PPI: prices of inputs producers use.
- Services PPI: prices of services, seven sectors first.
- Why countries prefer it: shows producer-level price pressure, covers services, enables pass-through analysis, fits IMF price statistics manuals, and is used by the US, UK, EU, Japan and China.
WPI versus PPI
| Point | WPI | PPI |
|---|
| Stage | Wholesale level | Producer’s gate |
| Covers | Goods only | Goods and services |
| Input-output analysis | Limited | Clear and structured |
| RBI inflation target? | No | No |
| Use | Price escalation clauses in contracts | Expected to replace WPI gradually |
India’s other price indices
| Index | Issued by | Used for |
|---|
| CPI (Combined) | NSO, MoSPI | RBI MPC target of 4% with +/- 2% band |
| CPI-IW | Labour Bureau, Ministry of Labour and Employment | DA for government employees |
| CPI-AL/RL | Labour Bureau | Wage and welfare indexation for agricultural and rural labourers |
Versus CPI, PPI records what producers receive and usually leaves out indirect taxes, whereas CPI records what consumers pay, taxes included.
Exam angle
- Nodal body: DPIIT (not NSO) for WPI and PPI.
- Remember base years: 2011-12 (old) and 2022-23 (new), effective 15 June 2026.
- RBI’s inflation target uses CPI (Combined), not WPI.
- Related terms: Output PPI, Trial Input PPI, Services PPI.