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The Ministry of Statistics and Programme Implementation (MoSPI) is shifting to the output Producer Price Index (PPI) as the deflator for calculating real GDP, replacing the Wholesale Price Index (WPI).
The change is being introduced from the June quarter, with the recent Index of Industrial Production (IIP) revision already using the output PPI.
The output PPI measures prices received by producers at the factory gate, considered more suitable for estimating real industrial output.
Revised real GDP estimates for earlier years, using the PPI deflator, are to be released on 31 August 2026.
A price index used to convert 'nominal' GDP (measured at current prices) into 'real' GDP (measured at constant prices), stripping out the effect of inflation. Using a more accurate producer-price measure gives a truer picture of real economic output.
Simple Analogy: If prices rise, your income may look bigger without buying more; the deflator removes that price effect to show what the economy really produced.
[["Measures","Wholesale prices of goods","Prices received by producers (factory gate)"],["Coverage","Goods only","Producer output (goods, with services scope)"],["Suitability as deflator","Less precise for real output","Considered more suitable"]]
["Aspect","WPI","Output PPI"]
GS Paper III > Economy > National Income Accounting
Economy & Financial Awareness
GDP measured at constant prices, after removing the effect of inflation