India’s consumer inflation measurement is set to undergo a major overhaul, with the base year of the Consumer Price Index (CPI) proposed to be revised to 2024 from the current 2012 series, according to an Ecowrap report by SBI Research, citing the recommendations of an expert panel constituted by the Ministry of Statistics and Program Implementation (MoSPI).
The revised CPI, with 2024=100 as the new base, aims to better reflect changing household consumption patterns, the growing use of services and the growing role of digital platforms. The first release of the new CPI series is scheduled for February 12, 2026, along with a retrospective series of rural, urban and combined indices starting in January 2013, the report said.
One of the most significant changes is a sharp reduction in the weight of food and drinks, which falls to 36.75% from 45.86% in the current series. This adjustment reflects the reduction in the share of food in household expenditure as income increases. At the same time, the weighting of transport, information and communication increased from 8.59% to 12.41%, while that of leisure, sports and culture more than doubled to 4.86%, signaling a structural shift towards service-oriented consumption.
The revised CPI basket will include 358 weighted items, distributed across 12 divisions, 43 groups and 62 classes, in line with the 2018 COICOP classification, thereby improving global comparability. The number of goods items will increase to 314, while services will increase from 40 to 50 items, reflecting broader coverage of modern consumer trends.
A key element of the new framework is the inclusion of e-commerce prices. The CPI 2024 series will collect weekly price data from 12 online marketplaces in cities with populations above 25 lakh, enabling inflation data to more accurately capture digital retail behavior.
Several methodological improvements were also proposed. The expert group recommended switching to the Jevons short index formula for calculating the basic level index to improve quality adjustment and reduce dependence on basic prices. Prices for centrally administered items such as fuel, rail fares and telecommunications services will be collected centrally, while electricity prices will be captured across four consumption tiers.
For precious metals, the CPI will move away from pricing personalized jewelry, but instead track standardized gold and silver items such as bracelets, rings and necklaces to ensure consistency. Employer-provided housing and free social transfers will be excluded from the index.
SBI Research estimates that applying the new weights to unchanged price indices would result in a slight increase in the headline CPI by 20-30 basis points on average, while during periods of high food inflation, the headline CPI could be lower by 20-30 basis points. This suggests that the revised CPI could provide a more stable and representative inflation signal to policymakers and markets.
This overhaul is expected to improve the accuracy, credibility and policy relevance of India’s inflation data as consumption patterns continue to rapidly evolve.
