The Cabinet today approved a proposal to release inflation data based on wholesale prices on a monthly basis and changed the base year to 2004-05 from 1993-94. At present, the inflation based on movement in Wholesale Price Index (WPI) is measured weekly. However, the data on primary and fuel items would continue to be released on a weekly basis.

“The new series of WPI (Wholesale Price Index) inflation with 2004-05 as the base year would be launched soon,” Commerce and Industry Minister Anand Sharma told reporters after a meeting of the Cabinet Committee on Economic Affairs.

He said that the government intends to release the new series after November 14.

Sharma said that the response from the manufacturing sector in terms of price changes every week has been poor but with the monthly-basis system in place, the response is bound to be better, reflecting the true position.

So, in effect, now the government would be releasing two sets of data — data for primary articles and fuel items on a weekly basis and comprehensive data on a monthly basis.

The weight of fuel, power, light and lubricants in the WPI is about 14 per cent while that of primary articles is 22.02 per cent and manufactured products contribute 63.75 per cent. Reacting to the move, chief statistician Pronab Sen said that the monthly data would provide much more reliable and accurate information and would help the capital market in taking informed decisions.

“The monthly data would be much more reliable and accurate and the market will be reacting to it much reliably. Needless volatility in asset market would also stop,” he said.

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