Small scale items to be included in WPI

[N.Sukumar]

A group of experts responsible for revamping the wholesale price index
has decided to include items manufactured by the small scale sector
for the first time to make the index more representative and
accurate.

The group, headed by Planning Commission member Abhijit Sen, has
selected 309 items from this sector in the new index, which is
expected to come into effect from November this year.

The WPI saga (No. of items in the index)
2004-05 1993-94 1981-82 1970-71
All commodities 1224 435 447 360
Primary articles 105 98 93 80
Fuel group 19 19 20 10
Mftd items 1100 318 334 270


The panel has also decided to increase the weight of manufactured
items and the fuel group in the new index. Accordingly, the new WPI
series, with a revised base year of 2004-05, will see the weight of
manufactured items go up to around 65 per cent from 63.75 per cent in
the present series. The fuel group weight will increase to around 15
per cent, from 14.23 per cent.

The weight of primary articles will decrease from 22.02 per cent to
around 20 per cent, reflecting changing production and consumption
patterns in the economy.

To this end, prices of wheat and rice in the public distribution
system will be dropped from the new series as they are administered
rates and not representative of wholesale prices.

In all, price quotations from all commodities are being increased to
around 6,000 from 1,918.

In a move aimed at collecting more timely and accurate information,
the data collection system is being ramped up. The Department of
Industrial Policy and Promotion has also decided to rope in the
National Informatics Centre, the government's information technology
arm, to help in data collection.

Each unit, from which the data have to come, will be given a login ID
and password to feed the relevant price data directly on to a
portal.

Meanwhile, the Sen committee has submitted an interim report on the
WPI revision to the ministry of commerce and industry last week. It is
likely to seek more time -- perhaps six months -- to submit the final
report.

The committee was set up five years ago and was originally expected to
submit its report by March 31 this year.

N.Sukumar
Research Analyst