Producer Price Index (PPI) - Indian Economy Notes

The Producer Price Index or PPI is an index used to calculate the movement of price from the seller’s point of view. It is one of the important price indices like the Consumer Price Index (CPI) and the Wholesale Price Index (WPI). PPI will come under Indian Economy subject of IAS Exam

What is the Producer Price Index (PPI)?

The Producer Price Index or PPI is an index that measures the average price change of goods and services. It can be calculated either when the goods leave the place of production or as they enter the production process.

  • In the case where the goods leave the production place, it is known as Output PPI.
  • Similarly, Input PPI is when goods enter the production process.

The PPI measures price movements from the seller’s point of view. Conversely, the consumer price index (CPI), measures cost changes from the viewpoint of the consumer. In other words, this index tracks changes to the cost of production.

Producer Price Index (PPI) vs Wholesale Price Index (WPI)

Producer Price Index (PPI) Wholesale Price Index (WPI)
The Producer Price Index or PPI is an index that measures the average price change received by the producer excluding the indirect taxes. The Wholesale Price Index represents the price change of a basket of goods and includes some taxes levied. The distribution costs are also considered in WPI. 
It tracks price change in both the goods and the services sector, giving a clear picture of the inflation in the country. The services sector which contributes to 60% of the GDP is not included in WPI.

Producer Price Index (PPI) vs Consumer Price Index (CPI)

Producer Price Index (PPI) Consumer Price Index (CPI)
PPI is an estimate of the change in average prices that the producer receives which are not always what the consumer pays for it. Consumer Price Index (CPI) measures the change in average prices that the consumer pays to the retailer.

Producer Price Index (PPI):- Download PDF Here

Indian Economy is a major subject of the General Studies Paper-3 section in the UPSC Syllabus. Aspirants can expect questions from this topic for UPSC prelims, mains or even in the Economics optional paper.

For more UPSC-related preparation materials visit the links given in the table below:

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12 Comments

  1. I got 47% in graduation and i done two diplomas in computer application (in UG diploma i got 79% )& ( in PG diploma i got 78%) . Can i apply for upsc ??

    1. Hi Ramanjit
      Yes, you can sit for UPSC 2020 as the minimum educational qualification is a Bachelor’s Degree. UPSC has not mentioned any minimum qualifying percentage hence, a candidate scoring anywhere between 33% – 100% in his/her graduation can apply for the CSE.

  2. What is the max age for UPSC ??

    1. Hi Roma
      The minimum age limit to sit for UPSC 2020 is 21 and the maximum is 32 (unreserved category) and 37(reserved category). Please check the UPSC Eligibility Criteria page for more information.

  3. How many attempts are there in UPSC

    1. Hi Lochan
      General Category aspirants – 6 attempts
      OBC aspirants – 9 attempts
      Defence Services Personnel – 9 attempts
      Persons with Benchmark Disability/ EWS (Economically weaker section) – 9 attempts
      SC/ST – Unlimited until they attain 37 years of age
      For more information on UPSC Eligibility Criteria, check the linked article.

  4. How many time I can give upsc exam and what are the subjects for upsc exam preparation

    1. Hi Ritu
      There are different number of attempts to the UPSC examination w.r.t to the category an aspirant belongs to. Please check UPSC Eligibility page to get entire set of details to sit for the exam.

  5. for EWS aspirants how many attempts are there to attend the upsc exam???

    1. There are 6 attempts for EWS aspirants.

  6. WHEN WE CAN APPLY FOR REGISTRATION OF UPSC FORM

    1. If you are sitting for UPSC 2021, you have to wait till next year February (Tentative) for the release of UPSC Notification.

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