BharatNotes What is Wholesale Price Index (WPI)?
The Wholesale Price Index (WPI) measures the average change in the prices of goods sold in bulk at the wholesale or first point of bulk sale in the domestic economy. It is compiled and published monthly by the Office of the Economic Adviser, under the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry — not the RBI. A provisional all-commodities index is released on the 14th of every month (next working day if a holiday).
A defining feature is that WPI covers only goods, not services. This distinguishes it from the Consumer Price Index (CPI), which captures retail prices including services and is the gauge the RBI now uses for inflation targeting.
Structure of the 2011-12 Series
The current series uses base year 2011-12 = 100 (notified 12 May 2017, replacing the 2004-05 series, to align with GDP and IIP base years). It tracks 697 items with weights based on Gross Value of Output.
| Major group | Weight (2011-12 series) | Coverage |
|---|---|---|
| Primary Articles | 22.62% | Food articles, non-food articles, minerals, crude petroleum & natural gas |
| Fuel & Power | 13.15% | Coal, mineral oils, electricity |
| Manufactured Products | 64.23% | 22 sub-groups of manufactured goods |
The 2011-12 series notably excludes indirect taxes to remove the impact of fiscal policy, improving comparability over time.
WPI vs CPI and the Policy Shift
Until 2014, the RBI relied on WPI as its headline inflation measure. On the recommendation of the Urjit Patel Committee (January 2014), it adopted CPI as the nominal anchor, targeting 4% (+/- 2%) CPI inflation. The rationale: WPI ignores services (the largest share of GDP), is heavily swayed by global commodity prices, and does not reflect the inflation households actually experience.
Current Status: Base-Year Revision and the Move to PPI
In a landmark reform (announced June 2026), the Government has revised the WPI base year from 2011-12 to 2022-23. The revised WPI series, along with new Producer Price Indices (PPIs) — Output PPI, trial Input PPI, and a Service PPI covering seven services (banking, securities, insurance, pension-fund management, railways, air passenger, telecom) — is scheduled for release on 15 June 2026 by the Office of the Economic Adviser, DPIIT.
The revamped basket expands items from 697 to 957, and adds new energy sources such as solar, wind and nuclear electricity. Crucially, the revised WPI is to be published for a five-year transition period and then discontinued, with PPI — which can include services — becoming the principal wholesale/producer price gauge, bringing India in line with international practice.
UPSC Angle
WPI is a high-yield Prelims fact bank: compiling agency (DPIIT), base year, highest-weight group (Manufactured Products), and the goods-only coverage. For Mains GS3, the analytical thread is the WPI-to-CPI shift for monetary policy and the 2022-23/PPI transition. Foundation concept — underpins questions on the inflation and monetary-policy topic family.
