Retail inflation at 2.75% in Jan under revised CPI data series, Pg13

Key Highlights:

• India's retail inflation, based on the revised Consumer Price Index (CPI), was 2.75% in January.
• The Ministry of Statistics and Programme Implementation (MoSPI) updated the CPI base year to 2024 from 2012.
• The new CPI basket includes 358 goods and services, compared to 299 in the previous basket.
• Food inflation, as per the revised CPI, stood at 2.13% in January.
• The new GDP series, with 2022-23 as the base year, will be released on February 27.

Detailed Insights:

• The CPI revision includes updating the base year, reconstituting the consumption basket based on the 2023-24 Household Consumption Expenditure Survey (HCES), and revising calculation methods.
• New items like airpods have been added to the CPI basket, while obsolete items like audio cassettes have been removed.
• Direct comparisons between the old and new CPI series are not recommended due to changes in consumption baskets, item weights, and methodologies.
• Food inflation rose due to the lower weight of vegetables and pulses and the increased weight of fruits in the new CPI.
• MoSPI will release the revised Index of Industrial Production in May, with a new base year of 2022-23.
• In January, the CPI was 0.35% higher compared to December 2025, indicating a pickup in overall price momentum.

Key Concepts Involved:

• Consumer Price Index (CPI): Measures changes in the price level of a basket of consumer goods and services bought by households.
• Inflation: The rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling.
• Base Year: A reference year used in an index number, against which changes in subsequent years are measured.