Government is planning to include the service sector in the Wholesale Price Index (WPI). A panel headed by Ramesh Chand is finalising the changes in the WPI to include 60 per cent of the economy for the first time. Further, government is change the base year from 2011-12 to 2017-18.
However, Consumer Price inflation (CPI) already includes the service sector. It includes education, health, tailoring and dry cleaning, and house rent. 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.
As per the other member, 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.
Further, the panel is also planning on shifting the base year for WPI from 2011-12 to 2017-18, but several economists want the base year to be a more recent one. 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.