The revision in Consumer Price Index that measures retail inflation will not only reflect new consumption trends but also play a key role in government decision‑making and serve as a critical indicator for businesses, Saurabh Garg, secretary at the Ministry of Statistics and Programme Implementation, told NDTV Profit on Thursday.
The base year for the CPI has been moved to 2024 from 2012 earlier and the basket expanded from 299 to 358 items. The new series will ensure that inflation measurement accurately reflects the average household's current consumption patterns, he said.
Garg said the broader aim of the tweaks is to ensure that the CPI remains consumer‑representative, with the 2024 base year offering a realistic picture of current spending patterns.
Over the last decade, India has witnessed major shifts in consumption, including notable changes in food habits and a considerable decline in cereal consumption. Digital services and OTT platforms have increasingly replaced traditional options like libraries, underscoring how lifestyle changes must be captured in the CPI basket. The surveys that inform CPI are based on sample sizes running into lakhs, boosting statistical reliability, the official said.
The Reserve Bank of India decides on monetary policy based on the CPI data. It aims to keep retail inflation contained in a band of 2% to 6%.
According to a Bloomberg News report, the weight of core inflation, which excludes food and fuel, will rise to nearly 58% in the new CPI series from 47.3% previously, based on calculations by DBS Group Holdings Ltd. Core inflation is typically more responsive to monetary policy action.
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