Govt to come out with new inflation index tomorrow

Consumer items widely used by the middle class like ice-cream, mineral water, flowers, microwave oven, washing machine, gold and silver will be reflected in the new series of Wholesale Price Index (WPI) inflation to be released tomorrow.

The new series of WPI for August with additional 241 items and change in the base year from 1993-94 to 2004-05 will be released tomorrow, a senior Commerce and Industry official said New Delhi.

With these items, the WPI will measure a total of 676 items against existing 435.

"This would give better picture of the price variation," a senior official said today.

Readymade food, computer stationary, refrigerators, dish antenna, VCD, crude petroleum and computers would also be part of the new series.

Under primary article group of the new WPI, there would be 102 items against existing 98 while fuel and power category would remain static at 19.

There is substantial increase in the number of items in manufactured products. In the new series, there would be 555 items compared to 318 items at the moment, the official said.

At the same time, weight of manufactured products would go up to 64.9% compared to 63.7% while primary articles group, including food, have come down to 20.1% against existing 22.02%.

The data release would accompany inflation numbers with old base year (1993-94) as well for comparison, the official said.

The system of hybrid approach of dissemination with weekly release of primary (including food index) and fuel index would continue, the official said, adding, but this would also shift to the new base year.

Depending on the relevance of articles in the present economic condition about 200 items have been dropped from the new series, the official said.

Some of the items like type-writers, video cassette recorders (VCRs) etc would not find place in the new series.

The new series of WPI is based on the recommendations of the working group headed by Planning Commission member Abhijit Sen.

The official said, the government is also working on Service Price Index which would measures the variation in prices of services providers.

By this fiscal year end, two indices namely on financial services and trade and transport should be released, the official said.