Service sector may be included in the Wholesale Price Index soon: Report

New Delhi, October 3, 2022

A government panel headed by Niti Aayog's Ramesh Chand is finalising the changes in the WPI to include 60 per cent of the economy for the first time

Apart from changing the base year from 2011-12 to 2017-18, the central government may include the service sector in the Wholesale Price Index (WPI). A government panel headed by Ramesh Chand is finalising the changes in the WPI to include 60 per cent of the economy for the first time, a report by the Times of India (TOI) said.

Consumer Price inflation (CPI) already includes the service sector. It includes education, health, tailoring and dry cleaning, and house rent, TOI added.

Chand is in favour of including the service sector in the WPI, but several other members have reportedly stated that developing such an index could take time. Chand is a member of the Niti Aayog.

The objection raised by other members is that while it is easy to obtain data for financial services and communications, it is difficult to obtain data for other services as they are not so organised. Also, it is difficult to measure technology's impact on services dependent on it.

The panel is also deliberating on shifting the base year for WPI from 2011-12 to 2017-18, but TOI reported that several economists want the base year to be a more recent one.

Also, they argue that changing the base year is a necessity to calculate actual numbers as the last two years were washed out due to the Covid-19 pandemic. It has also resulted in a change in consumption patterns.

If the base year is not changed to 2017-18 soon, they may wait a couple of years and change it to 2022-23, they added.

[The Business Standard]