Skip to main content

New Wholesale Price Index (WPI) series

The WPI is more accurate now with a wider basket to arrive at the numbers


   The new inflation index has already commenced. The index has changed the composition of the Wholesale Price Index (WPI) series. The new data series lowers weightage of the more volatile food items and correspondingly hikes that of core manufactured products.


   The new series has incorporated consumer items such as ice cream, mineral water, refrigerator, computer, and TV. The price volatility in these items is relatively limited as compared to fuels or food products. The data released by the Ministry of Commerce and Industry is the first that uses the new base year of 2004-05 and covers a wider basket of goods. The old series used 1993-94 as the base year. The release of the current series of WPI with 1993-94 as its base will be discontinued.


   The new basket of the WPI has a broader representation of commodities, change in base year and lower weights accorded to primary articles. The new index includes 555 commodities in the manufactured goods segment as against 318 earlier.


   The new series of the WPI is based on the recommendations of a working group. The working group submitted its technical report in May 2008 and recommended the change of the base year to 2004-05. The new series comprises different weightage levels, relative to the changes in the economy over a period of time.


   For example, the weight of manufactured products increased from 63.74 percent as per the 1993-94 base price levels to 64.97 percent now. On the other hand, the weight of primary articles in the new index has come down to 20.11 percent as against 22.02 percent earlier. As such, the food prices will still comprise a fifth of a share in the WPI index.


   The new WPI with 2004-05 as its base year includes nearly 237 more manufactured items than the 1993-94 Index. The new WPI is expected to give a realistic picture of price rise. The broad-basing is expected to smoothen the Index. There is a substantial increase in the number of items in the commodity basket and number of quotations to collect price data in comparison to the existing series.


   The new WPI series now measures a total of 676 items, an increase by 241 items from the previous list comprising 435 items. The basket of manufactured products has surged from the earlier 318 items to 555 now. The list under primary articles group has gone up from 98 to 102. Earlier, the Department of Industrial Policy and Promotion (DIPP) had changed the frequency of the WPI series to monthly releases from the earlier practice of weekly releases though it continues to provide weekly inflation numbers for sensitive items such as food and fuel.


   For August, the WPI inflation stood at 8.5 percent under the new series as against 9.5 percent in the old series.


   The DIPP said that it will also come out with a Services Price Index (SPI) by the end of 2010-11. This will include indices of banking and finance and also trade and transport. Other services which could be taken up at a later date are ports, aviation, telecom, and post and telegraph, among others.

 


Popular posts from this blog

Mutual Fund Review: Religare Tax Plan

Tax Plan is one of the better performing schemes from Religare Asset Management. Existing investors can redeem their investment after three years. But given the scheme's performance, they can continue to stay invested   Given the mandated lock-in period of three years, tax saving schemes give the fund manager the leeway to invest in ideas that may take time to nurture. Religare Tax Plan's investment ideas revolve around 'High Growth', which the fund manager has aimed to achieve by digging out promising stories/businesses in the mid-cap segment. Within the space, consumer staples has been the centre of attention for the last couple of years and can be seen as one of the key reasons for the scheme's outperformance as compared to the broader market. It has, however, tweaked its focus and reduced exposure in midcaps as they were commanding a high premium. The strategy seems to have worked as it returned a 22% gain last year. Religare Tax Plan has outperformed BSE 100...

Mutual Funds: Past Performance is not just everything

Many a times your agent / distributor / relationship manager tries to push you some mutual fund schemes by enticing you with a typical sales pitch…"Sir, this scheme has generated 20% returns in the past one year." And this sales pitch often gets louder when the market conditions have been favourable. Some of the agents / distributors / relationship managers have another unique way of luring you. They say, "Sir / madam this scheme has been awarded the best scheme award in the past by a leading business channel"... And hearing all these sales talks you investors very often get attracted and sign a cheque in favour of the respective scheme.   But please ask yourself do you hear these sales talks when the capital markets turn turbulent? Why is it so that your agent / distributor / relationship manager avoids talking to you during turbulent times of the capital markets and doesn't boast about returns generated by the respective funds or awards being conferred on t...

Dynamic Bond Funds

Invest Mutual Funds Online Download Mutual Fund Application Forms Apart from liquidity and returns, tax efficiency is another factor which should be taken into account for such investments. Today, while you're getting decent, predictable returns from bank fixed deposits, they, along with FMPs, can be ruled out as options because of the lack of interim liquidity. Hence, the only other option that you have is a dynamic bond fund. While investments in dynamic bond funds can be a compromise in terms of returns, they are extremely liquid and more tax efficient.   Some of the dynamic bond funds that you can invest in are: UTI Bond Fund, Birla Sun Life Dynamic Bond Fund Templeton India Income Fund ------------------------------------- Invest Mutual Funds Online Transact Mutual Fund Online   Download Mutual Fund Application Forms from all AMCs Download Mutual Fund Application Forms   Best Performing Mutual ...

L&T Tax Advantage

Best SIP Funds to Invest Online   The fund follows a growth approach to investing in quality stocks that have a large-cap tilt This large-cap tilted ELSS has fared consistently and fared better than its benchmark by posting a higher margin of outperformance. The fund follows a growth approach to investing in quality stocks that have a large-cap tilt, which is evident in its portfolio. The portfolio is further well diversified across market capitalisation and sectors with over 60 stocks finding a place in it. The upside with this fund is the fact that it has witnessed both down and up cycles of the market to come across as a winner in the long run. Do not doubt the fund based on its size and a few mediocre years of performance, because when analysing its rolling three year returns, the fund's performance stands out to qualify as a must have ELSS in one's portfolio. Stay invested through the lock-in and there are chances of benefiting from returns as well as tax savings will prov...

Tax Planning: Income tax and Section 80C

In order to encourage savings, the government gives tax breaks on certain financial products under Section 80C of the Income Tax Act. Investments made under such schemes are referred to as 80C investments. Under this section, you can invest a maximum of Rs l lakh and if you are in the highest tax bracket of 30%, you save a tax of Rs 30,000. The various investment options under this section include:   Provident Fund (PF) & Voluntary Provident Fund (VPF) Provident Fund is deducted directly from your salary by your employer. The deducted amount goes into a retirement account along with your employer's contribution. While employer's contribution is exempt from tax, your contribution (i.e., employee's contribution) is counted towards section 80C investments. You can also contribute additional amount through voluntary contributions (VPF). The current rate of interest is 8.5% per annum and interest earned is tax-free. Public Provident Fund (PPF) An account can be opened wi...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now