New Delhi . Soon many products like green tea, solar energy, sanitizers, corn flakes, brown rice, mushrooms, watermelon, wicket-keeping gloves, flutes, electric iron and aloe vera may be included in the revised Wholesale Price Index (WPI). This index, which gives a picture of inflation, will be changed and the base year will be 2017-18 from 2011-12. According to the draft report of the Revision Working Group, the number of products included in the index is expected to be increased from 692 to 1,196, making the index more inclusive.
Failed to catch change
The base year for the current WPI is 20211-12. The number of products involved is limited, so it fails to fully capture the changes in production trends in recent years. The expanding product basket may help in locating more products that have changed consumption patterns over the years. In this way a clear picture of inflation will come out. Production is largely determined by consumption.
Many new products added –
Agricultural commodities include new products like Isabgol, Aloe vera and Menthol, Fennel and Fenugreek, Moth, Mushroom and Watermelon. Leafy vegetables have been excluded due to technical difficulties in ascertaining the prices. Since the government is pushing for renewable energy, the revised WPI will also include changes in solar energy prices.
Will help in the compilation of statistics –
While retail is now a measure of inflation in the country, it is still considered a comprehensive measure of prices in inflation as the WPI is older. WPI helps in compilation of National Accounts Statistics. It is also widely used in escalation clauses in the purchase of raw materials, plant and machinery, construction, infrastructure projects.
The current number of products included in the index is 692.
The number of products is now expected to increase to 1,196.
The share of fuel and energy may come down to 11 per cent.
The share of the food index will increase from 24 percent to 27 percent.
The base year will now be increased to 17-18 instead of 2011-12.