Consumer price index-based inflation for January 2026 rose to 2.75% with food price inflation at 2.13%. The estimates under the new base year of 2024 are a break from the earlier series of 2012.
Apart from the base year revision, the methodology and data sources for compiling retail inflation under the new series has also been updated and reflect the changed consumption pattern based on the Household Consumption Expenditure Survey 2023-24.
For starters, the weight of the food and beverages basket has come down in the new series. In the 2024 CPI series, food and beverages has a weight of 36.75. Extrapolating it to the 2012 series, which gave a weight of 45.86% to food and beverages in the overall CPI inflation basket, the 2024 weight to the category would be 40.1%.
Meanwhile, in the 2024 series, housing has been expanded and the revised basket includes housing, water, electricity, gas and other fuels.
Expanded basket
The categories or baskets in the new series of CPI inflation has also been expanded to 12 from six in the earlier series with the miscellaneous category giving way to more granular categories of furnishings, household equipment and routine household maintenance; health, transport, information and communication, recreation, sport and culture, education services, restaurants and accommodation services, personal care, social protection and miscellaneous goods and services.
New additions to the item baskets include rural housing, online media service provider, streaming services, value added dairy products, barley and its products, pen drives and external hard disks, attendants, babysitters and exercise equipment. Outdated items have also been removed which include VCRs, VCDs, DVD player and hiring charges, radio, tape recorder, second hand clothing, CD/DVD audio, video cassettes and coir/ rope, as per an official release.
Overall, in the 2024 series, as many as 308 goods and 50 services would be tracked for prices as compared to 259 goods and 40 services in the 2014 series. Price data will be captured from more markets – 1,465 rural markets, 1,395 urban markets and 434 towns in the new series as against 1,181 rural markets, 1,114 urban markets and 310 towns in the old series.
Further, 12 online markets will be tracked every week for prices across major towns have over 25 lakh population in order to capture price movement on e-commerce platforms.
Latest economic transformations captured
Chief Economic Advisor V Anantha Nageswaran noted that the economy has undergone a significant transformation in the past decade, which will now be reflected in the changes in the new CPI series.
“Since the basket is now aligned with the recent expenditure data, the inflation signals will match with prevailing economic conditions,” he told reporters, adding that this would improve the information basis for calibrating monetary and fiscal policy.
Responding to a question on core inflation, Saurabh Garg, Secretary, Ministry of Statistics and Programme Implementation said that this would be decided by the Reserve Bank of India on what items to include for calculating core inflation.
MOSPI is also planning to undertake the next HCES in 2027-28, which will be the basis of the next CPI inflation series, he said. The ministry hopes to revise the base year every five years, he said.
Experts noted that the new retail inflation series has a similar trajectory to the old series. “The difference in m-o-m CPI inflation between 2024 and 2012 base year series from February 2025 to December 2025 ranges between negative 16bp to 34bp and it averaged 0.2bp in 11 months. This points towards a similar inflationary trajectory in the 2024 series with that of the 2012 series,” said Paras Jasrai, Associate Director, India Ratings and Research.
Madhavi Arora, Chief Economist, Emkay Global Financial Services said the agency does not expect the new inflation series to materially influence policy in the near term. “An extended rate pause looks likely, underpinned by a cyclical upturn in both growth and inflation and improving confidence following the conclusion of the US–India trade negotiations,” she said.
