India updates CPI base year to 2024 with expanded basket and data
India updates CPI base year to 2024 with expanded basket and data
The statistics ministry shifts India's CPI base year to 2024, widening the basket to 358 items, boosting online data use, and reshaping inflation tracking for policy.
The government unveiled a revamped Consumer Price Index (CPI) series, changing the base year from 2012 to 2024. This update aims to reflect evolving consumption patterns and provide a more accurate inflation gauge for monetary policy. The CPI, a key RBI inflation measure, will now reset with 2024 as the reference year and will be revised every five years to stay in step with shifting spending habits.
Under the new framework, the basket expands to 358 items, comprising 308 goods and 50 services, organized across 12 divisions, 43 groups, and 92 classes. Price collection has widened to 1,465 rural markets (up from 1,181) and 1,395 urban markets (up from 1,114). Notable new entries include AirPods, hand sanitisers, OTT subscriptions, air purifiers, ecommerce purchases, and international airfares, while outdated items such as library charges, radio fares, and horse-cart fares have been removed. Despite the overhaul, about 98% of the basket remains comparable with the previous series.
Weights are based on the Household Consumption Expenditure Survey (HCES) 2023-24, with the share of food and beverages decreasing to 36.75% from 45.86%. Conversely, weights for transport and communication, housing and utilities, and personal care have risen, signaling shifts in what households spend on.
RBI’s inflation gauge will now offer more granular data, including state-wise and sector-wise indices, alongside the national picture. Early reports linked to the revamped series show January 2026 inflation around 2.75%, illustrating how the new base year can influence headline readings.
The CPI base-year revision is designed to improve policy calibration by better capturing modern consumption patterns, while maintaining continuity through about 98% comparability with the old series. This alignment supports more timely and relevant monetary and fiscal policy decisions.
