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Linking Factor For WPI Series (BASE: 1993-94)
The office of the Economic Adviser to the Government of India, Ministry of Commerce & Industry, has replaced the old series (Base:1981-82=100) by a new series with a base 1993-94=100 for the Wholesale Price Index with effect from the week ending 1st April, 2000.

To maintain continuity in the time series data on Wholesale Price Index, there is a need for a linking factor so that the new series, when released, may be compared with the outgoing one. For this purpose, there are several methods available in the literature for linking a new series with an old one. Some of the most common and widely used methods among these are; i) arithmetic conversion method ii) ratio method and iii) regression method.

As a matter of policy, the Economic Adviser's office does not prescribe or recommend to data users any particular method of linking, for conversion of index figures from one series to another. The choice of the method to link various price index series is, left to be decided by the users.

The office of the Economic Adviser has been using the arithmetic conversion method. According to this method, the linking factor for the all commodities index is 2.478 for conversion of indices from the base 1993-94 series to the earlier base 1981-82.

The Office of Economic Adviser does not convert the indices at disaggregate level, because the difference in the year to year price changes between the two series can be attributed to the differences in weights as well as price changes at the group /sub-group levels. The users are requested to satisfy themselves regarding the conversion factor they calculate. The Office of the Economic Adviser shall not check / correct / verify any conversion factor or converted index figures. As a matter of information the weights of different commodities for both the series, and the index for the year 1981-82, is appended ( the index for 1993-94 in the new series is 100).

Office of the Economic Adviser, Ministry of Commerce & Industry
New Delhi, dated: the 6th June, 2000.