New Delhi: India will introduce a Producer Price Index (PPI) covering output, input and services prices, to offer a more realistic assessment of inflationary trends in the economy, while gradually phasing out the Wholesale Price Index (WPI), the government said Tuesday."Considering the wide usage of WPI in price escalation clauses, this index will be released for five years from the date of release of the revised series along with PPI and will be discontinued thereafter," the commerce and industry ministry said in a statement.It is believed that the five-year period would give sufficient time to users to switch from WPI to PPI.The new WPI series will use 2022-23 as the base year, replacing FY12, and the first print with the base for May along with the backseries from April 2023, will be released on June 15.TIL CreativesPPI to cover output, input and services prices; revised WPI series will switch to FY23 base year, to be out on June 15The Department for Promotion of Industry and Internal Trade (DPIIT) will also release a new series of Output Producer Price Index (OPPI), a trial Input Producer Price Index (IPPI), and Service Producer Price Index (Service PPI) of seven services - Banking, Securities Transaction, Insurance, Management of Pension Funds, Railways, Air (Passenger), and Telecom with base year 2022-23 on June 15."After five years, the PPI is expected to replace WPI," said Praveen Mahto, Principal Economic Adviser in the ministry.The transition from WPI to PPI aligns with global best practices adopted by advanced economies and the recommendations of the International Monetary Fund. WPI inflation shot up to a 42-month high of 8.3% in April.Mahto said that the Service PPIs for seven services have been compiled in the first phase based on the availability of data from administrative sources/agencies.More services are planned to be added to the basket of services PPI in subsequent phases, subject to the availability of data."Services PPI will be released on a quarterly basis. The release schedule is being finalised in consultation with the Ministry of Statistics and Programme Implementation," the ministry said.The monthly Trial Input PPI (only for manufacturing sector) will be published on an experimental basis from March 2026 onwards, and would enable the department to examine the data quality and also receive feedback from stakeholders and users.Services PPI will be released for the fourth quarter of FY26 (provisional) along with the back series from first quarter of FY24 to the third quarter of FY26.WPI, Output PPI and Service PPI are being compiled on the basis of basic price (which excludes net tax and trade and transport margin), whereas Input PPI is being compiled using purchaser's price since industries purchase inputs from the market.The availability of output and input PPI gives a "better understanding of the price movements of output items vis--vis input items being used in an industry," the department said. It will also explain how input inflation experienced by producers is passed through to output. The availability of both price indices enables the calculation of "double deflation" when estimating real GDP.Revised WPIThe total number of items has been increased to 957 from 697 in the updated WPI and new sources of energy, such as solar and wind, have been added under electricity group.In addition, nuclear electricity has been included in the basket.Similarly, crude petroleum and natural gas have been shifted from the primary articles to the fuel and power.This reorganisation would lead to better alignment, as this group already houses other major fuels such as coal, electricity, and petroleum products.