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India to Revise CPI Basket and Base Year for Better Inflation Tracking

Kumari Sonali

India to Revise CPI Basket and Base Year for Better Inflation Tracking:

The Consumer Price Index (CPI), a key indicator for measuring retail inflation in India, is set for a significant revamp. As per the Ministry of Statistics and Programme Implementation (MoSPI), the CPI basket will be expanded, and the base year will be updated to 2024, based on findings from the Household Consumption Expenditure Survey (HCES) 2023-24. This shift aims to better reflect evolving consumption patterns and strengthen the accuracy of economic policymaking. Minister of State for Statistics Rao Inderjit Singh recently announced that India will Update the CPI basket to include more than the current 299 items. Change the base year from 2012 to 2024, based on fresh consumption data from HCES 2023–24. Possibly revisit inflation targeting norms, especially by re-evaluating the weightage of food items, which dominate the CPI. This development comes amid ongoing debates on whether inflation targeting should exclude food prices due to their supply-driven volatility.

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