The new WPI series with 2004-05 as the base year will replace the current series of WPI with 1993-94 as the base year. The method will show changes in the overall price line and contemporary consumption pattern apart from gauging inflation.
Consumer items like readymade foods, personal computers, VCDs, flowers and dish antennae that dominate modern day lifestyle will figure among the 241 fresh items in the basket of commodities in the new WPI. With this, the index will have 676 items as against the previous 435 items.
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To show the consumption pattern, the new series has dropped 200 items such as typewriters making way for modern consumer items like computers, refrigerators, televisions and video disc players.
It has also altered the weight attached to each commodity group. Now, manufactured items will have a higher weight of 64.972 as against 63.749 earlier.
The weight for fuels has also increased to 14.910 as against the previous 14.226. But for primary articles, the weight has been lowered to 20.118 as against 22.025. “The new series will give a robust, truer picture of the Indian economy,” Sharma told newspersons while announcing the new index. “The new basket of items will help monitor the price scenario better. This will reflect actual price movement,” he said.
The new WPI is based on the recommendations of a working group headed by Planning Commission member Abhijit Sen. The group, constituted in 2003, was mandated to consider revision of current series of WPI while examining the issues relating to choice of base year, selection of commodities and creation of weighting diagram. It submitted its report in May 2008, recommending the change of the base year to 2004-05. This was approved by a committee of secretaries last month.
Analysts say the new series of WPI has given greater emphasis to manufactured goods at the expense of primary products, including food.