The finance ministry has nudged all ministries and departments to move to Producer Price Index (PPI), from the current Wholesale Price Index (WPI), for rate escalation and adjustment clauses in future government procurement contracts. The Department of Expenditure, in a communication to all ministries and departments, said that PPI is a more internationally accepted index compared to WPI used in government contracts to define price escalation. For the first time, the commerce ministry has started issuing monthly PPI data for both goods and services since June to better reflect price movement at the producer's level, thus paving the way for phasing out wholesale price inflation numbers in the next five years. "Ministries/Departments are encouraged to adopt Producer Price Index (PPI) in place of Wholesale Price Index (WPI) in all price escalation clauses of future contracts, once PPI becomes available," the expenditure department said in an office memorandum dated July 13, which was .
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FinMin nudges ministries to use PPI for rate adjustments in govt contracts
The finance ministry has nudged all ministries and departments to move to Producer Price Index (PPI), from the current Wholesale Price Index (WPI), for rate escalation and adjustment clauses in future government…
The finance ministry has nudged all ministries and departments to move to Producer Price Index (PPI), from the current Wholesale Price Index (WPI), for rate escalation and adjustment.
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