New CPI series: MoSPI to release item weights before inflation data, Pg11

Key Highlights:

• The Ministry of Statistics and Programme Implementation (MoSPI) will release item weights for the new Consumer Price Index (CPI) series before the inflation data release on February 12, 2026.
• The new CPI series is based on the 2023-24 Household Consumption Expenditure Survey (HCES) and will include 364 items, an increase of 65 from the current series.
• The new series may see a reduction in the weight of food items, which currently make up almost 46% of the CPI basket.
• MoSPI will release the classification structure of items based on Classification of Individual Consumption According to Purpose (COICOP) 2018 in January 2026.

Detailed Insights:

• The weights of items in the CPI basket are crucial for determining the headline inflation rate, as it is the weighted average of price changes for each item.
• The current CPI series, based on the 2011-12 consumption basket, includes 299 items, with items like house rent having a high weightage and others like stove burners having very low weightage.
• Some items from the current CPI series, such as VCD and DVD rentals, are expected to be eliminated in the new series due to obsolescence.
• The share of expenditure on food has decreased for both rural and urban households, according to the 2023-24 HCES, which may lead to a reduced weight for food items in the new CPI.
• The new CPI series will adopt the COICOP 2018 framework, an international standard endorsed by the UN Statistical Commission, for classifying items.
• The classification structure will change from 6 groups and 23 sub-groups in the current series to 12 divisions and 43 groups in the new series.

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.
• Household Consumption Expenditure Survey (HCES): A survey that collects data on the consumption expenditure of households.
• Classification of Individual Consumption According to Purpose (COICOP): An international standard classification system used to classify and analyze individual consumption expenditures incurred by households, non-profit institutions serving households, and general government.