Petroleum, flowers included in WPI base revamp

The government has revamped the system of calculating the much-watched wholesale price index by launching a new 'series' today, with 2004-05 as the base year instead of the current 1993-94. The basket of items in the new series has also been enlarged from 435 to 676. The existing series will be restated so that a comparison of the last five years is possible.

''The change in base would improve the accuracy and make the index less prone to fluctuations,'' said TCA Anant, chief statistician of India. The WPI, the most widely tracked measure of inflation, will have 400 new products in the goods basket, while about 200 outdated items will be dropped from the list.

There is a substantial increase in the number of items in the basket of manufactured products. In the 1993-94 series, there were 435 items and 1918 quotations. This has been hiked to 676 items in new series while 5,482 quotations are to be collected.

Some of the important primary articles included in the new series basket are flowers, lemon, and crude petroleum; while among the manufactured products now included are ice cream, canned meat, palm oil, readymade / instant food powder, mineral water, computer stationary, leather products, scooter / motorcycle tyres, polymers, petrochemical intermediates, granites, marbles, gold and silver, construction machinery, refrigerators, computers, dish antennae, transformers, microwave ovens, communication equipment (telephone instruments), TV sets, VCDs, washing machines, and auto parts.

The new series would also have a different weight in line with the changes in the economy. The weight of the primary articles category in the WPI would now be 20.11 per cent compared to 22.02 per cent earlier, fuel and power would be 14.91 per cent from 14.22 per cent, while that of manufactured products would be 64.97 per cent against 63.74 per cent.

The committee of secretaries (CoS), in a meeting held on 9 August, approved the release of new series of WPI with 2004-05 as its base. The department of industrial policy and promotion (DIPP) will release the new series.