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हिन्दी — Read in HindiGrowth, national accounts and their revision
How India measures what it produces: GDP, the national accounts, their revisions and the indices behind them.
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The Producer Price Index and the new statistical series
Copy link to The Producer Price Index and the new statistical seriesPrelims and Mains
LeadNew numbers: the Producer Price Index and the new industrial indexJune 2026
Why in news
In June 2026 India released a new Index of Industrial Production and a new Wholesale Price Index, both on the base year 2022-23. With them came India's first Producer Price Indices, which will replace the wholesale index in about five years.
Background
- An index measures change against a base year. The base year fixes the basket of goods and their weights.
- India's main series had used bases more than a decade old: 2011-12 for GDP, industrial output and wholesale prices, and 2012 for consumer prices.
- An old base misses new products and the changed shape of the economy.
- Through 2026 every series moved: GDP to 2022-23, consumer prices to 2024, and now industrial output and wholesale prices to 2022-23.
Wholesale price and producer price compared
- The Wholesale Price Index measures prices at the stage of the first bulk sale, and it covers only goods.
- A Producer Price Index measures what the producer receives. It excludes taxes and transport, and it can cover services.
- The wholesale index counts the same price rise more than once as a good passes down the chain; the producer index avoids this.
- The producer index is the international standard.
What was launched
- An Output index for goods, a trial Input index for manufacturing, and a Services index for seven services, among them banking, railways and telecom.
- The wholesale index runs alongside for five years, so that contracts tied to it can switch. The industrial index moved to producer prices as its deflator in June, and the new GDP series uses them too.
- The new industrial index is wider: it adds water supply, sewerage and waste management as a fourth section.
Why it matters
- Real growth: output in rupees is turned into real output by dividing by a price index. A better price index gives a truer growth figure.
- Policy: the Reserve Bank and the Budget lean on these numbers.
- Trust: India's national accounts had drawn a poor grade from the International Monetary Fund for their dated methods.
- The risk: a jump in growth or inflation that comes only from a change of base weakens confidence, unless the old and new series are linked in the open.
The way forward
- Publish the back series and the linking method with each new series.
- Fix a calendar for revising base years, every five years.
- Move contracts and policy from the wholesale index to the producer index in step.
Prelims facts
- Base years now: GDP, industrial output and wholesale prices 2022-23; consumer prices 2024.
- The industrial index and consumer prices are released by the statistics ministry; wholesale and producer prices by the Office of the Economic Adviser in the commerce ministry.
- The Reserve Bank's inflation target is on consumer prices, not wholesale prices.
- The Index of Core Industries now has nine industries, with iron ore added.
- A Producer Price Index can cover services; the wholesale index does not.
An index measures change against a base year. The base year fixes the basket of goods and their weights.
What changed
See also: The new GDP series
Also filed elsewhere
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