India’s inflation series is now 12 years up-to-date. The National Statistics Office (NSO) released the new Consumer Price Index (CPI) series on Thursday with base year of 2024. It replaces the earlier series which was based to 2012.
The new series reduces the weightage of food in household budgets. It is also more contemporary — dropping such things as buying and renting of VCRs and DVDs and including others such as money spent on OTT subscriptions.
It also factors in rental expenditure, not just in cities but also invillages.
These changes are keeping in line with the evolution of consumption patterns in the Indian economy.
The new series will also increase the sample frame of data collection and, for the first time, include prices from e-commerce platforms.
Headline CPI print for the month of January 2026 is 2.75%. Food inflation in January 2026 is 2.13%. This is within the broad target range of RBI’s inflation target of 2%-6% and well below its actual target of 4%.
RBI’s February Monetary Policy Committee (MPC) meeting held last week projected an inflation of 3.2%, 4% and 4.2% in the quarters ending March, June and September in 2026. The MPC resolution said that it would wait for the new inflation series to be published before making a full-year forecast.
To be sure, adoption of the new series does not mark a drastic departure in inflation trends. A comparison of the month and month change in new and old series over 12 months from the back-series data provided by the NSO shows that the two largely move in tandem.
“The exercise is being done for enhancing the coverage and representativeness of the inflation measure. The revision introduces more granular data enabling policymakers, financial institutions, businesses and citizens with precise data-driven decisions”, a press release issued by NSO said.
Chief Economic Advisor V Anantha Nageswaran on Thursday said the new CPI series will improve the quality of data used in formulating monetary and fiscal policies. “Since the CPI basket is now aligned with recent expenditure data, the inflation signals derived from this will be more closely matched with the economic conditions. This improves the information basis for calibrating monetary and fiscal policy,” Nageswaran told reporters at a press conference on the new CPI series.
The biggest change in the new inflation series will be around a nine percentage point drop in the share of food and beverages in the overall basket. This trend is in keeping with the dropping weight of food in Consumption Expenditure Surveys (CES) over time in India. Information on changes in disaggregated weights is awaited as Thursday’s press release has not published it in a break from the earlier tradition of publication of inflation data.
Among the 12 broad categories in the new series, inflation was the highest in personal care, social protection and miscellaneous goods (19%) and the lowest for transport (0.1%).
“The trend of the CPI number being higher in the new index was realized, largely reflecting shifting base in food consumption, and a relatively larger weight for core CPI, especially services…Today’s inflation print, while a tad higher, does not signal any undetected inflationary pressures in India”, Rahul Bajoria, chief India economist at Bank of America said in a note.