Economy ยท GS3
Wholesale Price Index rebased to 2022-23
One line
The government revised the Wholesale Price Index base year from 2011-12 to 2022-23, updating the basket and weights used to track wholesale price change.
Summary
A newer base year better reflects the structure of production and trade. Users must still distinguish wholesale inflation from consumer inflation and compare old and new series carefully.
PYQ pattern
UPSC often turns this issue into statement-based questions on institutions, mechanisms, and policy limits. Use the official UPSC question-paper archive.
Core notes
- The Office of the Economic Adviser compiles WPI under the Department for Promotion of Industry and Internal Trade.
- WPI mainly tracks prices of goods at the wholesale or producer-facing stage; it does not cover retail services in the same way as CPI.
- Rebasing can change the item basket, weights, price quotations, and treatment of products.
- A new base improves relevance but can create a break in the time series unless an official back series or linking method is available.
Prelims lens
- WPI is a price index, not a production-volume index.
- CPI measures prices faced by consumers and is compiled by the National Statistical Office.
- The base year is a reference for weights and index values; it is not the publication year.
MCQ 1
Consider the following statements:
- WPI is a price index, not a production-volume index.
- WPI and CPI have identical baskets and weights.
Which of the statements given above is/are correct?
- A. 1 only
- B. 2 only
- C. Both 1 and 2
- D. Neither 1 nor 2
Reveal answerHide answer
A
Statement 1 is correct. Statement 2 is incorrect: wPI and CPI have identical baskets and weights is not a valid conclusion.
MCQ 2
Which institution compiles India's WPI?
- A. Office of the Economic Adviser
- B. Election Commission of India
- C. Finance Commission
- D. National Green Tribunal
Reveal answerHide answer
A
The Office of the Economic Adviser in DPIIT compiles and releases WPI.
Mains
Question, 10 marks, 150 words: Why do base-year revisions matter for inflation measurement, and what comparability problems can they create?
Approach:
- Explain structural change and index weights.
- Compare WPI with CPI and output indicators.
- Discuss breaks in series and revision policy.
- Suggest transparent methods and a documented back series.