New Consumer Price Index (CPI) Index

Why in News?

Recently, India released the new CPI series (Base 2024=100) showing lower food weight and stable inflation, raising expectations of a prolonged interest rate pause.

• CPI – The Consumer Price Index (CPI) is designed to measure the changes over time in the general level of retail prices of selected goods and services that households purchase for consumption.  
  • Inflation Measure – Inflation is calculated as a year-on-year percentage change in CPI.
• Released by – Ministry of Statistics and Programme Implementation (MoSPI)
• The CPI (Rural, urban and combined) has been released by it since January 2011 with a base year of 2010.

The Base Year is a chosen year taken as a reference point to compare prices over time.

• New CPI Index – Revises CPI item basket and updates weights using the latest Household Consumption Expenditure Survey (HCES) of 2023-24 data.

New CPI shows lower food weight and inflation at ~2.75% (January 2026), influencing monetary policy outlook.

• Basket of Items expanded –
  • Weighted items increased from 299 to 358 items.
  • Service items increased from 40 to 50.
• CPI Composition – Food items’ weight reduced from ~46% to 36.8% (~10 percentage points decline).
• Consumption Pattern –
  • Rural food & beverages weight – 42%
  • Urban food & beverages weight – 30%
• Base Year Revision – Base year revised from 2012 to 2024 to reflect structural changes in consumption, urbanisation, and digitalisation.
• Global Comparison – Food Weight in CPI in Developed economies is around 11–26% food weight.
• Emerging economies (China, Brazil, South Africa): <30%.

References

1. IE | New Consumer Price Index (CPI) Index
2. PIB | Consumer price index on base 2024