No.
25011/1/2018-Toll
Government of India
Ministry of Road Transport ft Highways
(Toll Division)
Transport Bhawan, 1, Parliament Street, New Delhi - 110001
Date: 04.06.2018
OFFICEMEMORANDUM
Subject: Linking factor due to change in base year of Wholesale Price Index (WPI) from
2004-05 to 2011-12-reg.
1. Recently, Office of the Economic Affairs has published new series of Wholesale Price
Index (WPI)with base year revised from 2004-05 to 2011-12. Whereas the old series of WPI
2004-05has been discontinued from April, 2017, the projects awarded to developers are still
governed by the old series of WPI. Therefore, in order to maintain continuity between the
two series, linking factor is to be used.
2. In this connection, the linking factor circulated by NHAIvide policy circular no. 18.30,
dated 20.03.2018(copy at Annexure-A) may be usedfor the purpose of 'user fee revision'.
3. This issueswith approval of Secretary, MoRT&H.
~
(SaswatMohapatra)
Asst. Executive Engineer (Toll)
E-mail: [email protected]
Enclosure: As above.
To,
1. DG(RD& SS).
2. All Chief Engineersof MoRT&H.
3. All RegionalOffices of MoRT&H.
Copyfor information:
1. PSto Secretary, MoRT&H.
2. PSto Addl. Secretary, MoRT&H.
3. Psto JS (Toll), MoRT&H.
I
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National Highways Authority of India
(Ministry of Road Transport and Highways)
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NHAI/Policy Guidelinesl Linking factor due to change of base year/2018
Policy No.18.30, Dated the March 2018 zo"
(Approved by ECin its meeting held on13.03.2018under AgendaItem No 338.25)
Sub: Linking factor due to change of base year of WPI from 2004-05 to 2011 -12.
Due to change of base year of Wholesale Price Index (WPI) from year 2004·05 to
2011-12-references have been received from field units of NHAI (from ROs & PIUs.) for
mechanism for adoption of WPI series 2011-12 for payment of price escalation in the
contracts with base year of WPI as 2011-12. The Wholesale Price Index (WPI) is an
economy wide index published by Office of the Economic Adviser (OEA) since 1942. The
base of the index, however, is being continuously revised and the latest series is with the
base 2011.12=100. The selection of commodities, weights structure and the source
agencies for supply of price quotations are decided by a Working Group constituted at
the time of revision of the base. The Wholesale Price Index (WPI) series has been last
revised on May 12, 2017 by shifting base year from 2004-05 to 2011-12. Linking factor
given for conversion of WPI (2011-12) indices to WPI (2004·05) series should be used from
April 2017 onwards as notified in the website of OEA (~~:,~in~ustrj_._E'ic.in).
2, Some of the items of the old series have been dropped and some new issues have
been included in the new series. List of items dropped or revised from WPI series (2004-
05) and list of items added or revised in WPI series (2011-12) are available on the website
(wv,w,eaindu5t.1'I.nic,in) of the Ministry of Commerce & Industry, Govt. of India.
3. The number of items in commodity basket of the index has increased from 676 in
the old series to 697 items in the revised series, there has been a complete review of the
commodity basket. All such items, which have become obsolete or have become
relatively less important vis-a-vis other items, have been dropped and new items, which
have emerged as important ones, have been included. Thus, there cannot be a one to
one correspondence between items in the two series. Number of quotations has also been
increased significantly from 5482 to 8331 and average number of price quotation per
commodity has increased from 8 quotations in 2004-05 to 12 quotations per commodity in
2011-12.
4. In order to maintain continuity in the time series data on wholesale price index,
linking factors have been provided so that the new series, may be compared with the
earlier one. The linking factor to link the WPI 2004-05 to WPI 2011-12 is developed by
using the Athematic conversion method as was the case during earlier transition to new
year. . -::-:.. .
revision uses WPI (All commodities) but the price adjustment
use WPI for (a) All commodities (b) Cement & Lime (c)
,(e) Rebars (f) Construction machinery etc.). OEA provides
., - ties level and major group levels not at further
Jactor for WPI to be followed are as under:
price variation formula may be defined by
of WPL2011·12}. Generally lower level
.,-_
-, -
"'-- -
fte(T1 indices have more vanability than indices at - . .
is ,moOthed. out. Most indices are produced acc~~~~aggr~g~ted level W';~,ev ...
indices at several levels oLagsregation within the hie'~r~~ h,erarShKaL'tru"u~~a"I'"
that escalatIOn contracts should ideally be linked to index .~. Therefore, It'll'·,,, ss ,w'th'
. . ....
digit level.ofaggr"gation. ._ '. ' a ue at_ twodfgitlevel'o~i~~d
. __. _ .. ' . our,
6.2 For Old Contracts sf ned and "iii contilluin
The pig seri ~s.of WPI.(2004-05) has' been rel~ased by OEAtill J..;~h·" '.' /.
. taunchmg the new, senes WI th base year 2011-12, QEAhas notified. that w~O'7. Wh,le
2011.'2 is efl ect We Irom 'ApnI 2017. Data for WPI (2011-.12) series has :;ase
provided from APrll,Z012 to March 20'.1 for the purpo~e of research and analysis onl ~.':::
hOW::!~
such, lor toll revmon and price vanatlon formula 10 NHAI, WPI of ·2004·05 ser/
released by ciEA wou!q. be used withou t a pplying Linking Factor till March , 2017. Li~'~~
lactor lor conversion 01 WPI (2011•12).md"esto WPI (2004.05) senes shall be used from
April 2017 onwards. .'
6.3 Summary of linking lactors to beUsed in NHAIwith eflectfroni April 2017 are . as . '
. "
under:" .
Linking Factors proposed to be used NHAIFY 2016~17 # Linking . Factor=
in for
WPI
.' group . - Co!(3)/Col (4)
Corresponding iteml with BaseYear
. Itemlltem Groupin new series
Series
.of itemS in the
the '. Old (2011-12) 2004-05
2011-12
(2004-05) 2' (5)
(3) (4)
111.6167 1.641
(2) 183.2000
(1) - 2.031
All commoditieS 261.6500 128.8500
.'
Alt commoditieS 86.2750 2.201
Primary articles 189.9000
Primary articles - 1.422
Fuel a power 157.3833 110.7083
Fuel & power Manufactured Products
"
Manufactured . 1.587
110.5833 .......•.
175.4833
Products Manufacture of Cement, lime I I
Cement &Lfme 107.8167 1.625 '
-,
and plaster 175.2333
Ordinary portland Cement 81.9583 : 1.953
Grey Cement 160.1000 .:
Stainless Steel bars & rods,
Steel (rods) . including flats 79.8500 1.902
151.8417
MS Bright Bars 109.7333 1.290
Rebars 141.5667
Weighted average of (i) Loader
Construction (wt. 0.00379) and (ii) Concrete
Machinery@ Vibrator & Mixer (wt. 0.01692)
I
# SImple average of monthly WPI from Apnl-16 to Mar-17
@ Formula lor getting WPI (2004·05) 01 Construction Machinery by using Linking Factor:
\
WPICM (04.05)= 1.290 x[ 0.00379 x WPILOADEd
11,12) + 0.01692 x WPI",~.'ib;",,( 11·12)] I
..
.. [0.00379.+0.01(>92}-~' :.c" " ,-- - - -
I
Thi~ issu~ ~thth"
_. __ ._ "_'," -"'i:-;.O;
~eprovaL of the Competen t Authori ty.
,":;-_ • ,;-- ,"
(V.K. ,SJ:)arma)
I
: Chief General Manager (Co9rd.)
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