New Delhi, May 8, 2018

The government will come out with a Producers’ Price Index (PPI) next month for 10 services, including telecom and railways, on experimental basis, a government official said today.

The move will help track inflation in these services, which will also include ports, postal, insurance, banking, transportation and air travel. “Services PPI will be released next month,” the official said.

Two major indices are used currently for tracking price movement -- Wholesale Price Index (WPI) and Consumer Price Index (CPI). While the WPI measures price movement of goods in wholesale markets, the CPI tracks inflation at the retail level and also includes certain services.

While the incidence of taxes are accounted for in WPI and CPI, the PPI would reflect the cost at the producers’ point sans taxes. PPI measures the average change in the price a producer receives for his goods/ services sold in the domestic market/ exports.

In the case of railways, price movement would be tracked for freight tariff and passenger fares. On the other hand, the index of banking would include direct services and fees. The PPI for services assumes significance as the sector contributes about 60 per cent to the country’s gross domestic product (GDP).

[The Hindu Business Line]