CPI Base Year Revision: SBI Research Analyzes Impact of New Index Series

MUMBAI : An expert group constituted by the Ministry of Statistics and Programme Implementation (MOSPI) has recommended revising the Consumer Price Index (CPI) base year from 2011-12 to 2023-24. According to SBI Research's latest 'Ecowrap' report, the new series (CPI 2024) is designed to accurately reflect changing household consumption patterns and align with global best practices. The first data release for CPI 2024 is scheduled for February 12, 2026, which will include inflation data for January 2026.

Key Structural Changes and Weight Revisions: The new series adopts the 'COICOP 2018' classification and will expand the basket to 358 weighted items, up from the previous series. A significant shift is observed in the 'Food and Beverages' group, where the weight has been reduced from 45.86% to 36.75%. Conversely, weights for 'Transport, Information and Communication' (increased to 12.41%) and 'Recreation, Sport and Culture' (increased to 4.86%) have seen notable rises. SBI Research estimates that the new weights may cause a marginal increase of 20-30 basis points in the overall CPI, though it could remain 20-30 basis points lower during months of high food inflation.

Modernized Data Collection and Methodology: To enhance data credibility, several innovative collection methods have been introduced:

• E-commerce Integration: To capture digital price movements, 12 online markets in cities with populations over 25 lakh have been added for weekly data collection.

• New Inclusions: International airfares for direct routes and OTT (online media) services will now be incorporated into the price collection framework.

• Housing and Electricity: Employer-provided accommodations will be excluded. Electricity charges will now be captured across four specific slabs (100, 200, 300, and 400 units) to reflect tiered pricing.

• Jewellery Standards: The group recommended pricing standard gold and silver items, such as basic bangles and rings, rather than customized pieces.