DPIIT takes skilled recommendation from IMF on PPI methodology

The Division for Promotion of Business and Inner Commerce (DPIIT) is finalising the mannequin for the Producers Worth Index (PPI), which is utilized in most G20 international locations, and has taken skilled recommendation from IMF on the methodology, DPIIT Secretary Rajesh Kumar Singh has stated. 

“Consultations with the Ministry of Statistics and Programme Implementation (MoSPI) have been accomplished. Procedural session with the Nationwide Statistical Fee (NSC) has to occur earlier than it’s positioned earlier than greater authorities, however we’re on the job,” he stated at a media briefing on Thursday.

Within the transitional part, each PPI and Wholesale Worth Index (WPI) will co-exist, the Secretary stated. “There will likely be a transitional part the place each will likely be there. Finally, WPI ought to go however a name will must be taken,” he stated.

PPI measures the common change in costs acquired by the producer and excludes oblique taxes. WPI, however, captures the worth adjustments on the level of bulk transactions and should embrace some taxes levied and distribution prices as much as the stage of wholesale transactions.

PPI additionally covers providers whereas WPI doesn’t.

“The procedural clearances required (for PPI) will likely be labored on. That course of is on however proper now the timeline can’t be given,” Singh stated.

Responding to a question on a proposal to vary the WPI base 12 months, the Secretary stated that it was one of many points that the federal government was contemplating. “The federal government, together with MoSPI, appears at different statistical indicators, together with the CPI and numerous different indicators. I suppose you possibly can anticipate some type of an replace of the bottom 12 months finally, however whether or not there will likely be one explicit base 12 months or totally different…as a result of our research present that different international locations have a number of base years for various kinds of indices. Except we’ve got a call I can’t actually say,” he stated.

Draft report

The DPIIT in June 2021 issued a draft report of a working group suggesting revising WPI base 12 months from 2011-12 to 2017-18 and proposed addition of about 480 new objects to the basked together with medicinal crops, pen drive, lifts, gymnasium tools, and sure bike engines within the new sequence. This is able to assist in presenting a extra lifelike image of the worth state of affairs within the nation, the report has steered.

At current, each WPI and CPI are used for monitoring value motion. Whereas the WPI measures value motion of products in wholesale markets, the CPI tracks inflation at retail stage and likewise consists of sure providers.