Inflation is one of the most important economic indicators in modern economies. It measures changes in the cost of living and scarcity, thereby serving an extremely critical political economy function. Any inflation number is only as good as the database from which it is derived. India’s Consumer Price Index (CPI) data, until December 2025, was based on the Consumption Expenditure Survey (CES) conducted in 2011-12, which was clearly outdated, especially in an economy as dynamic and evolving as India.
Ideally,
Inflation is one of the most important economic indicators in modern economies. It measures changes in the cost of living and scarcity, thereby serving an extremely critical political economy function. Any inflation number is only as good as the database from which it is derived. India’s Consumer Price Index (CPI) data, until December 2025, was based on the Consumption Expenditure Survey (CES) conducted in 2011-12, which was clearly outdated, especially in an economy as dynamic and evolving as India.
Ideally, the new series should have been released much earlier. But, the government’s decision to junk the findings of the 2017-18 CES and the delay in commissioning and conducting a new CES due to the pandemic led to a postponement of this exercise. The wait is now over with the National Statistical Office (NSO) releasing a new CPI series with a base year of 2024 from January 2026. Headline inflation in January 2026 is 2.75%. Among the important changes in the new series is the continued reduction in weight of food items compared to the old one. Food and beverages as a whole will now have a share of 36.8%, nine percentage points less than in the old series. This aligns with the earlier trend in the evolution of India’s representative household basket. The new series also includes commodities that were not represented and markets that are online rather than physical. These developments align with the spirit of the changes in the Indian economy.
The NSO release shows that the new and old inflation series track each other closely regarding month-on-month changes over the last year. This is reassuring, for it indicates that the consistency of data has been preserved. All eyes will now be on the new GDP series scheduled to be released at the end of this month.
One Subscription.
Get 360° coverage—from daily headlines
to 100 year archives.
Archives
HT App & Website