Govt. unveils new CPI series; retail inflation in Jan. at 2.75%, Pg1

Key Highlights:

• The Ministry of Statistics and Programme Implementation (MoSPI) released the new Consumer Price Index (CPI) series with 2024 as the base year.
• Retail inflation for January 2026 is reported at 2.75% under the new CPI series.
• The new CPI series includes 358 items, an increase from the previous series' 299 items.
• Data collection has expanded to 1,465 rural markets and 1,395 urban markets, including 12 online marketplaces.

Detailed Insights:

• The CPI base year was updated from 2012 to 2024 to reflect changes in consumption patterns, market structures, and household expenditure compositions.
• The updated CPI series uses data from the Household Consumption Expenditure Survey (HCES) 2023-24 to assign new weights to goods and services.
• The weightage for food and beverages has been revised downward to 36.75% from 45.86%, potentially reducing the volatility of headline inflation.
• The housing category has been expanded to include water, electricity, gas, and other fuels, with a combined weight of 17.67%.

CPI

• The new series divides goods and services into 12 broad groups, providing more granular data compared to the previous six groups.
• The ministry will provide a linking factor to calculate the index back to 2013, following international practice.

Key Concepts Involved:

• Consumer Price Index (CPI): A measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care.
• Base Year: The reference year in an index number series, against which changes in subsequent years are compared.
• Inflation: The rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling.