Will the CPI Increase Marginally by 20-30 bps with the New Base Year?
Synopsis
Discover how the new base year 2024 will impact the Consumer Price Index. A recent SBI Research report reveals expected marginal increases and adjustments based on food inflation. The release of the new CPI series promises to enhance accuracy and credibility in measuring inflation.
Key Takeaways
New CPI series based on the base year 2024 will be released on February 12.
Anticipated increase in CPI by 20-30 basis points.
Adjustment in CPI during high food inflation months.
Data collection to include online platforms .
Implementation of COICOP 2018 structure for global comparability.
New Delhi, Jan 30 (ANS) The Consumer Price Index (CPI), now based on the new base year 2024, is projected to rise slightly by 20-30 basis points. However, during periods of heightened food inflation, the adjusted CPI will reflect a decrease of 20-30 basis points, as highlighted in a report by SBI Research.
The government has established an expert committee aimed at accurately assessing CPI, taking into account the evolving consumption patterns of households and integrating the latest global practices, including advancements in methodology.
The initial CPI series reflecting the new base year 2024 will be unveiled on February 12, featuring index data starting from January 2025 and inflation statistics for January 2026. Additionally, a back series of data at the All-India level for Rural, Urban, and Combined sectors from January 2013 will also be made available on February 12.
The report states, “By applying new weights to the existing index, we estimated that the overall CPI will experience a minor increase of 20-30 basis points. Conversely, in months where food inflation is high, the revised CPI will be lower by 20-30 basis points.”
Price data will be gathered from 1,465 rural markets and 1,395 urban markets across 434 towns. The total count of weighted items in this basket will consist of 358 items, with goods increasing from 259 to 314 and services from 40 to 50.
In a bid to bolster credibility and ensure that Indian CPI aligns with global standards, the latest structure of the Classification of Individual Consumption According to Purpose (COICOP) 2018 will be implemented in the CPI 2024 series, as per the recommendations of the expert committee.
To validate rural and urban samples and to identify markets, shops, and items, a comprehensive market survey will be conducted. The previous practice of mapping reserve shops in CPI may be discontinued, according to the report.
In a move to capture price fluctuations on e-commerce platforms, 12 online markets (with populations exceeding 2.5 million) will be included in the CPI 2024 series, and prices will be collected weekly from these online platforms.
Since the prices of rail fares, postal services, and fuels (petrol, diesel, LPG, CNG & PNG) are set centrally, price collection and compilation will be managed by the Price Statistics Division (PSD). Additionally, price collection for telecom and online media services (OTT) will also be conducted centrally through online sources.
Furthermore, airfare for international direct routes will be included in the price collection framework for CPI 2024.
In the case of gold and silver jewelry, the group recommended maintaining a standard definition for jewelry items that are consistently available in the market, instead of pricing custom pieces. Consequently, prices for basic gold and silver items, such as bangles, necklaces, and rings, will be collected.
Point of View
It's crucial to recognize the significance of the CPI adjustments in our economy. The government's initiative to refine CPI measurement reflects a commitment to accurately assess inflation, which is vital for household financial planning and economic policy. This approach not only aids in understanding current economic trends but also enhances the reliability of data crucial for informed decision-making at the national level.
NationPress
11 May 2026
Frequently Asked Questions
What is the expected change in CPI with the new base year?
The CPI is expected to increase marginally by 20-30 basis points with the new base year 2024.
How will food inflation impact the new CPI?
During months of higher food inflation, the new CPI will be lower by 20-30 basis points.
When will the new CPI series be released?
The new CPI series based on the base year 2024 will be released on February 12.
What changes are being made to the data collection process?
Prices will be collected from 1,465 rural markets and 1,395 urban markets, with new e-commerce platforms included for pricing.
What will the expert committee's recommendations ensure?
The recommendations aim to enhance the credibility and global comparability of the Indian CPI.
