The Ministry of Commerce and Industry revealed the updated two economics pointer on May 12, 2017 according to the 2011-12 base year — the index of industrial production (IIP) and the wholesale price index (WPI) — to better reflect supplementary changes in the economy and enhance nature of data. The manufacturing production number rose strongly and inflation slowed drastically utilizing the new scale.
Production output rose 2.7% in March with a difference of 1.9% growth in February, as per the indicators. In old base, IIP declined 1.2% in February however climbed 2.5% in March. The new IIP arrangement has included solar power, hormonal preparations and gold to the container that will be followed while expelling things, for example, calculators, color picture tubes, tooth powder, gutka, flavored milk, and shoes to reflect changes manufacturing output. The scope of the new arrangement of IIP is constrained to the organized sector only.
India's WPI facilitated to 3.85% in April from 5.3% in March, The container of goods for WPI has been changed to incorporate 199 new things, getting rid of 146 and taking the combined total to 697 from 676. A few things, for example, carrots, walnuts, flammable gas have been added to the new WPI other than changes in weights of items.
Central Excise duty is removed while calculating Prices to consider WPI , which in opinion of experts will showcase producers price Index . Consumer price Index (CPI) will include GST therefore the gap between CPI and WPI will show the implications of GST in future. It also indicates that while GST will be rolled out from 1st July 2017 , Wholesale price index will not portray any picture of this shift.
The Ministry has likewise propelled new WPI food index to screen costs better. In view of the suggestions of a working board headed by the late Saumitra Chaudhuri, the new WPI index incorporates seven new fruits and nine new vegetables in the WPI basket of products.
WPI is also used to calculate GDP and GVA , this move will highlight declined WPI which will be of great help in showing growth in GDP.
It is to be noted that before 2014 RBI used WPI for making most policy decisions whereas then RBI Governor Mr. Raghuraj Raman made shift to consumer price index (CPI) for decision making. Inflation reflection is better gathered from the price we pay to retailer it also shows the actual picture of price rise.
The Modi government may be enticed to seize on that measurement to approve its contention that last year's stun demonetization drive did not bring a swell up in the economy. Indian industry growth rate at 5% in 2016-17 or at its quickest pace in the previous five years, as indicated by another informational index the Central Statistics Office put out today.
The new data additionally makes the growth rates in the UPA government look considerably high from 0.2% as per old formula to 3.35% growth during last year of Manmohan Singh Prime Minister Ship.