The base year for the current series is 2011-12 and since then significant structural changes have taken place in the economy, which has necessitated the move, an official statement said.
"Therefore, it has become necessary to examine the coverage of commodities, weighting diagram and related issues pertaining to the existing series of index numbers of WPI," it added.
The working group will be tasked to select the most appropriate base year for the preparation of a new official series of index numbers of Wholesale Price (WPI) and Producer Price Index (PPI) in India.
Besides, they will review commodity basket of the current series of WPI and suggest changes of commodities in the light of structural changes in the economy witnessed since 2011-12.
The group will also review the existing system of price collection, examine the existing methodology of compilation of PPI and method of computing linking factor adopted so far.
The exercise to finalise new base year for WPI comes at a time when several questions have been raised about the veracity of GDP data revision that has changed growth numbers, taking it ahead during the previous NDA government despite disruptions such as demonetisation and GST.
The members of the working group have been drawn from various government and non-government agencies including RBI, Finance Ministry, National Statistical Office, Ministry of Petroleum and Department of Consumer Affairs.
It also has SBI chief economist Soumya Kanti Ghosh Das, economist Surjit Bhalla, APMEAC member Shamika Ravi as members. It will also have representation from CRISIL, Bank of America Merrill Lynch and Kotak Mahindra Asset Management.
( With inputs from IANS )