Wholesale Price Index (WPI) in India: Base Year 2022-23, Weights, and Use as Deflator

The base year of India’s Wholesale Price Index (WPI) was revised to 2022–23 (2022–23 = 100) with effect from 15 June 2026, replacing the long-running 2011–12 series. Released by the Office of the Economic Adviser (DPIIT), the revised series expands the basket from 697 to 957 items and was launched alongside India’s first official Producer Price Index (PPI) framework. The older 2011–12 WPI continues in parallel for a five-year transition before being discontinued.

The Wholesale Price Index is India’s oldest inflation gauge and, for almost six decades, the headline number that newspapers and ministers quoted when they talked about prices. Released monthly by the Office of the Economic Adviser in the Department for Promotion of Industry and Internal Trade (DPIIT), the Wholesale Price Index measures the average change in prices of goods traded in bulk between businesses — at the producer or wholesaler stage, before any retail margin or service component is added. Although the RBI shifted its inflation-targeting anchor to CPI in 2016, the Wholesale Price Index still matters: it remains the GDP deflator for large parts of National Accounts, the price index used for indexing many government contracts, and an early-warning indicator of producer-side inflation. For UPSC GS-III, the Wholesale Price Index is essential because every question on inflation, monetary policy, and price stabilisation expects you to compare it cleanly against CPI.

What WPI Actually Captures

The 2011–12 WPI series tracked the price movement of 697 items — all goods, zero services — at the wholesale or producer level. That base year of 2011–12 = 100 was adopted in May 2017 on the recommendation of the Saumitra Chaudhuri Working Group, and was itself revised to 2022–23 = 100 from 15 June 2026 (Ramesh Chand Working Group), which raised the item count to 957. The 697-item figures below describe the 2011–12 series, which continues in parallel during the five-year transition. Compared with the older 2004–05 base series, the 2011–12 revision:

• Increased the item count from 676 to 697.
• Removed indirect taxes from the price quotations to bring WPI closer to a true producer price index (PPI), aligning with international practice.
• Created a new “WPI Food Index” by combining food items from the Primary Articles group with those in Manufactured Products.

The Office of the Economic Adviser releases provisional WPI numbers on the 14th of every month with a two-week lag, and revises them after eight weeks. Item prices are collected from manufacturers, mandis, and selected wholesale markets across the country.

Why WPI Still Exists Despite CPI Targeting

The decision to switch monetary policy to CPI in 2016 did not retire WPI. WPI continues to be the primary deflator for compiling real GDP in the manufacturing, mining, and electricity sectors, where output is valued at producer prices. The Cost Inflation Index for capital gains taxation, escalation clauses in many public-sector contracts, and most international commodity comparisons still lean on WPI. It is also the cleanest signal of producer-side cost pressure — when crude oil, metals, or fertiliser prices surge globally, WPI moves first and CPI follows with a lag of a few months.

The Three WPI Categories and Their Weights

The Wholesale Price Index basket is divided into three major groups. Memorising the weights is exam-critical. (The percentages below are the 2011–12 series weights; the 2022–23 series keeps the same three groups but shifts crude petroleum and natural gas from Primary Articles into Fuel and Power, and adds solar, wind and nuclear under Electricity.)

• Primary Articles — 22.62% (Food articles 15.26%, Non-food articles 4.12%, Minerals 0.83%, Crude petroleum and natural gas 2.41%)
• Fuel and Power — 13.15% (Coal, mineral oils, electricity)
• Manufactured Products — 64.23% (Food products, beverages, textiles, chemicals, basic metals, machinery, transport equipment, and 16 other sub-groups)

Two structural points about these weights deserve attention.

First, manufactured products dominate. Nearly two-thirds of WPI weight sits in manufactured goods, which is why core WPI (WPI excluding food and fuel) is essentially a manufacturing producer price index. This is the polar opposite of CPI, where food alone is 46 percent of the basket.

Second, services are missing entirely. WPI does not include haircuts, healthcare, education, transport fares, telecom tariffs, or rent. In an economy where services now contribute over 54 percent of GVA, WPI is therefore a deeply incomplete picture of overall price pressure — which is precisely why CPI overtook it as the monetary policy anchor.

WPI Food Index

The composite Food Index, introduced with the 2011–12 base, has a weight of about 24.4 percent — combining food articles from the Primary Articles group and food products from Manufactured Products. The RBI and government use this composite series to track food price pressure at the wholesale stage, complementing the CPI-Food component on the retail side.

How WPI is Calculated

WPI uses the Laspeyres formula: a weighted arithmetic mean of price relatives, with weights fixed at the base year. In practical terms, the price collected for each item in the current month is divided by its price in the base year (2011–12), multiplied by 100 to get a price relative, and then averaged across items using the base-year weights. Because the weights do not change between revisions, WPI shares the substitution-bias problem that all Laspeyres indices face — but for a producer-price gauge, fixed weights are considered acceptable.

WPI vs CPI — The Comparison UPSC Loves

The most reliably asked CPI/WPI question expects a clean tabular comparison.

The gap between the two can be large. In 2020 WPI was contracting at -3 percent while CPI was rising above 6 percent, because services and food (heavy in CPI) were spiking even as manufacturing demand collapsed. In 2022, the picture reversed — WPI ran above 15 percent for several months on the back of imported fuel and metals, while CPI peaked at around 7.8 percent.

WPI as a Deflator and Its Limitations

The Wholesale Price Index is structurally the deflator of choice for several National Accounts series, but using a producer-price index to convert nominal GDP into real GDP introduces well-known distortions.

• Service sectors get inappropriate deflators. Because WPI has no services, real-output estimates for finance, IT, hospitality, and trade rely on a mix of CPI components and sector-specific deflators, creating measurement noise.
• No reflection of consumer welfare. WPI tracks bulk transactions, not what households experience at the kirana store. A falling WPI does not mean the cost of living is falling.
• Sensitivity to global commodity cycles. Because fuel and metals carry heavy weights and most are imported, WPI is highly correlated with the dollar-rupee rate and crude oil — sometimes more than with domestic monetary conditions.
• Quality and new-product bias. Like CPI, WPI struggles to capture quality improvements and the arrival of genuinely new goods such as smartphones, lithium-ion batteries, or EV components.

Producer Price Index (PPI): Launched June 2026

India launched its first official Producer Price Index (PPI) framework on 15 June 2026, alongside the 2022–23 WPI series. The Working Group under B. N. Goldar had recommended a PPI covering goods and services back in 2017, and pilot data followed from 2021. The new framework, with base year 2022–23, comprises an Output PPI (OPPI), a trial Input PPI (IPPI) (initially manufacturing-only), and a quarterly Service PPI for seven services (banking, securities, insurance, pension funds, railways, air passenger and telecom). All use the “basic price” methodology, excluding taxes and transport margins. WPI will run in parallel for a five-year transition and then be discontinued — bringing India in line with the United States, Eurozone, and Japan, which all use PPI rather than WPI.

Recent WPI Behaviour and Policy Signals

In 2025, WPI inflation has been running in a low single-digit range — below 2 percent for most months — even as CPI hovered near 4 percent. This divergence reflects three forces: stable global commodity prices, a soft manufacturing demand environment, and persistent retail-side services inflation captured only by CPI. For policymakers, a low WPI alongside moderate CPI signals that producer cost pressures are contained, giving the RBI room to keep policy rates on hold or trim them. When WPI starts running above CPI for more than two quarters, the standard alarm is “imported inflation feeding into producer costs” — usually triggered by crude oil or a sharp rupee depreciation that worsens the Balance of Payments.

Where WPI Fits in the UPSC Mains

The Wholesale Price Index appears across GS-III in three contexts: inflation measurement (where you must distinguish it from the Consumer Price Index), monetary–fiscal coordination (where it links to the fiscal deficit because higher WPI raises nominal GDP and lowers the deficit ratio mechanically), and the post-liberalisation price story (where WPI fell from double digits in the 1980s to a structurally lower range after the 1991 LPG reforms). It also matters for distributional questions: producer-price inflation hits small manufacturers harder than large ones, with implications for inequality captured by indicators like the Gini Coefficient.

Frequently Asked Questions

PDF