Following are quotes from Editorial in Economic Times :
Does the official wholesale price index (WPI) give a true picture of the extent of price rise (see ET, April 14)? Does the Index of Industrial Production (IIP) correctly capture the health of Indian industry? Is the data on agriculture or the services sector accurate? Answers to these and similar questions are important, not only because data integrity is a fundamental tenet of data collation but, more important, because policy responses would vary hugely depending on the answers.
... successive governments have failed to pay sufficient importance to upgrading the quality of our data. As a result, corrective action is often initiated when it is too late. Following the recommendations of the National Statistics Commission under the chairmanship of Dr C Rangarajan, the government has initiated some steps to rectify this situation.
Take for instance, recent efforts to construct a Producer Price Index (PPI) that will give a more accurate picture of inflation. The expert group has been unable to make any headway as it finds it cannot compel producers to supply data. It’s the same with the IIP that presently uses an out-dated base of 1993-94. The Collection of Statistics Bill, 2007, could make data collection easier but the Bill is still pending in Parliament. So for the moment we are really batting blind. Not a happy thought, but there it is!
There are many other instances where Indian government could improve quality of data (for example: air transportation, fatal road accidents etc.) Now a days there is no excuse for not having good data. Computers are cheap, hard disk is cheaper. Companies like Google a turn on with Tera bytes of data and over eager to host your data in the cloud.
I just googled for WPI and found on Ministry of Commerce & Industry website that there is some effort to revise WPI, hopefully to make it more accurate. Here is the link:
Suggestions from Industry / Trade Associations, Price Statisticians, Experts and Index users for improvements of the new series of WPI