Inter-ministerial consultations are progressing on revising the Wholesale Price Index (WPI) base year from 2011-12 to 2017-18, a top government official has said.

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Revising base year to 2017-18 for computation of wholesale inflation would help in presenting a more realistic picture of the price situation in the country.

The Department for Promotion of Industry and Internal Trade (DPIIT) in June last year issued a draft technical report of a working group, which suggests revising the base year of wholesale price index and addition of about 480 new items such as medicinal plants, pen drive, lifts, gymnasium equipment and certain motorcycle engines in the new series.

The draft report was placed in public domain and its feedbacks were considered before finalisation of the report.

"The working group submitted its report in June. ...Now inter-ministerial consultation is in progress," DPIIT secretary Anurag Jain told PTI.

In the case of agriculture commodities, new items such as medicinal plants like isabgol, aloe vera and menthol; fennel seed and methi seed, mushroom and watermelon were proposed to be added in the new series subject to availability of data.

At present, the index has a total of 697 items, including primary articles (117), fuel and power (16), and manufactured products (564).

In the new series, a total of 1,176 items in these three categories have been proposed -- primary articles (131), fuel and power (19), and manufactured products (1,026).

According to the draft report, in the current series of WPI, the electricity index is computed based on the price quotations of power generating stations only from hydro and thermal power stations. Now it is proposed to build three indices -- hydro, thermal and solar electricity. Thermal electricity is further bifurcated into thermal coal and gas.

WPI revision is a periodic exercise. Current revision process of WPI considering base year 2017-18 has been undertaken to incorporate the structural changes in the economy.

Two major indices are used 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 retail level and also includes certain services.

WPI is a key indicator to measure the average change in prices of a fixed set of commodities at the initial stage of a commercial transaction over a given period of time with reference to a base year.

Ever since the introduction of the WPI in 1942 with the base year 1939, seven revisions have taken place introducing new base years - 1952-53, 1961-62, 1970-71, 1981-82, 1993-94, 2004-05 and 2011-12, Jain said.

The current WPI base year 2011-12 series was launched in May 2017.

The wholesale price-based inflation eased to a five-month low of 13.93 per cent in July on easing prices of food articles and manufactured products. The WPI-based inflation softened for the second consecutive month in July, raising hopes of further decline in wholesale prices in the months to come.