New Delhi, Aug. 17 -- The Finance Ministry has advised ministries and departments to adopt the Producer Price Index (PPI) instead of the Wholesale Price Index (WPI) for price escalation and rate adjustment clauses in future government procurement contracts.

The Department of Expenditure, in an office memorandum dated July 13, said PPI is more internationally accepted and reflects price movements at the producer level more effectively than WPI.

The department has encouraged ministries and departments to shift to PPI in price escalation clauses once adequate PPI data becomes available, reported PTI.

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