Producer Price Index (PPI)

India is planning to move from the Wholesale Price Index to Producer Price Index (PPI) in future as most of the G20 countries follow this practice.

  • The National Statistical Commission (NSC) is examining the working group report on the roadmap for introducing the PPI and their recommendations are awaited.
  • Producer price indices in manufacturing measure the rate of change in prices of products sold as they leave the producer.
  • They exclude any taxes, transport and trade margins that the purchaser may have to pay. The PPI is a measure of wholesale inflation.
  • PPIs provide measures of average movements of prices received by the producers of various commodities.
  • They are often seen as advanced indicators of price changes throughout the economy, including changes in the prices of consumer goods and services.
  • Manufacturing covers the production of semi-processed goods and other intermediate goods as well as final products such as consumer goods and capital equipment.
  • A variety of price indices may be used to measure inflation in an economy. These include consumer price indices (CPI), price indices relating to specific goods and/or services, GDP deflators and producer price indices (PPI).

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