Overview
On 15 June 2026, the Ministry of Commerce and Industry released the first ever PPI data for both goods and services. The move aligns India with the practice of advanced economies and follows the recommendation of the IMF. The government intends to discontinue the WPI within five years.
Key Developments
- Release of Output PPI (goods) at 109.6 for May 2026, up from 108.6 in April.
- Experimental release of Input PPI (manufacturing) at 104.9 for May 2026.
- Output PPI inflation rose to 9.4% in May, close to WPI inflation of 9.68%.
- Base year for both WPI and PPI shifted to 2022‑23, covering 957 items.
- First phase of Service PPI includes seven services: banking, securities, insurance, pension‑fund management, railways, air passenger, and telecom.
- Weightage in Output PPI (goods): manufactured items 69.93%, agriculture‑forestry‑fishing 22.16%, electricity 4.49%, mining‑quarrying 3.42%.
Important Facts
The revised series of WPI and Output PPI (Goods) now cover all representative goods transacted in the economy. Input PPI (Goods) captures the price of goods consumed by the manufacturing sector. No weights are assigned to the Service PPI at present because the seven services do not represent the whole service sector; individual indices will be published without weights.
The shift from WPI to PPI stems from a report by a working group led by former NITI Aayog member Ramesh Chand. The group, set up on 30 December 2024, was tasked with revising the WPI base year and compiling the PPI with the new base.
Exam Relevance
Understanding the transition from WPI to PPI is crucial for GS‑3 (Economy) questions on inflation measurement, price indices, and their impact on GDP estimation. The new indices provide a more accurate picture of producer‑level price pressures, which affect real value addition and monetary‑policy decisions. Candidates should note the role of the IMF and the policy‑making function of NITI Aayog in shaping statistical reforms.
Way Forward
In the next phase, the Ministry will expand Service PPI to cover the entire service sector using data from the GST‑based price collection survey. Continuous feedback from stakeholders will refine the Input PPI methodology. Over the five‑year horizon, the WPI will be phased out, and the PPI will become the primary indicator for producer‑side inflation, aiding more precise macro‑economic planning and policy formulation.