Wholesale Price Index, currently used to measure inflation, is an 'unsatisfactory' indicator of price movement and is eroding the credibility of government data in the minds of people, said the PM's Economic Advisory Council chairman, Suresh Tendulkar.
"It (WPI) is an unsatisfactory indicator of rate of change of prices of consumer goods with which our everyday experience of inflation is associated", he said while speaking at the third Statistics Day in New Delhi on Monday.
Noting that the divergence with the WPI and movement in consumer prices has been rising in the recent past, Tendulkar said, "(it is) inadvertently contributing to the erosion of the credibility of WPI in the minds of the general population."
Although the WPI-based inflation has been in the negative for two consecutive weeks, the Consumer Price Index, which measures movement in the prices that consumers pay, reported double-digit increase in May.
Pointing out that services sector contribute significantly to the GDP, Tendulkar said, efforts should be made to develop indices for services like banking, eventually leading to general price index of services like the WPI for commodities.
