SBI Report: India's New CPI Series Boosts Credibility and Global Relevance
Synopsis
India's newly launched CPI 2024 series adopts the 'COICOP 2018' structure, enhancing its credibility and global comparability. Discover how this change reflects urbanization trends and impacts inflation analysis.
Key Takeaways
New CPI 2024 series adopts 'COICOP 2018' structure for credibility.
Significant urbanization trends incorporated into the new series.
Food and beverages weight reduced to 36.75% .
Inflation nowcasting enhanced with 148 weighted items .
New items in CPI basket include streaming services and rural housing .
New Delhi, March 5 (NationPress) The latest Consumer Price Index (CPI) series for 2024 in India has transitioned to the 'COICOP 2018' framework, significantly enhancing its credibility and facilitating global comparability. This change reflects the evolving trends in urbanization, according to a report published on Thursday.
The SBI Research report indicated that the previous CPI 2012 classification showed a projected decline in the share of food and beverages to 40.10%, whereas the new series features a reduced share of 36.75%.
With 90% of its weights derived from 148 items, the new CPI series is notably skewed and unevenly distributed, proving to be “extremely beneficial for inflation nowcasting, corporate pricing strategies, and scenario analysis,” the report noted.
The report also pointed out that the new series effectively captures the shifts in urbanization, highlighting that Telangana, Gujarat, Maharashtra, and Haryana have emerged as the leading states in urbanization trends over the past decade, each experiencing more than a 10% increase in their weights.
Interestingly, a comparison of the food inflation rates of PDS beneficiaries across states shows that the exclusion of PDS items is likely to introduce a positive bias in food inflation readings.
Telangana currently exhibits the highest inflation rate, reflecting the impacts from the bifurcation of the erstwhile United Andhra Pradesh. Apart from Tamil Nadu and Karnataka, all major states recorded an overall inflation rate below 3% as of January 2026.
The new CPI series has notably increased the weightage for housing, water, transport, and information and communication in rural areas compared to the previous series.
Conversely, in urban regions, the weight assigned to housing and water has diminished, along with food and beverages, as per the new series.
This revised series expands the number of weighted items from 299 to 358, includes 1,465 rural and 1,395 urban markets plus 12 online markets, and decreases the weight of food in the CPI basket from 45.8% to 40.1%.
New entries in the CPI estimation basket include rural housing, online media/streaming services, value-added dairy products, barley, pendrives, and external hard drives, among others.
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Point of View
It is essential to highlight the importance of the new CPI series in reflecting changing economic realities in India. This update aims to provide a more accurate measure of inflation while adapting to the urbanization trends observed in various states. The enhancements in the CPI methodology are crucial for effective economic analysis and forecasting.
NationPress
5 Aug 2026
Frequently Asked Questions
What is the significance of the new CPI series in India?
The new CPI series enhances credibility and allows for better global comparability by adopting the 'COICOP 2018' structure, reflecting the latest urbanization trends.
How does the new CPI series affect inflation measurement?
The new series adjusts the weight distribution of various items, providing a more accurate representation of inflation and influencing corporate pricing strategies.
Which states lead in urbanization according to the new CPI series?
Telangana, Gujarat, Maharashtra, and Haryana are identified as the leading states in urbanization trends over the last decade.
What are the new items included in the CPI calculation?
New items include rural housing, online media/streaming services, and various consumer electronics, enhancing the CPI estimation process.
How has the food weight changed in the new CPI series?
The weight of food in the CPI basket has decreased from 45.8% to 40.1%, reflecting the changing consumption patterns.
