New Delhi, Feb 13 (.) India’s Chief Economic Advisor V Anantha Nageswaran on Friday said the new Consumer Price Index (CPI) series using 2024 as a base year captures the transition in household consumption trends over the past decade, with greater spending going towards services even as the share of food in domestic budgets declined.
It will help fiscal and monetary policy makers formulate better responses to evolving economic conditions, he said.
“The lower weightage for the otherwise volatile group of food and beverages may make the headline inflation less volatile, ceteris paribus. The monetary policy response in particular could become more focused on aggregate demand pressures rather than dealing with supply-induced inflation and dealing with it through a demand-sensitive variable like the interest rate,” he said.
Nageswaran further added that the new series could improve the assessment of development indicators like poverty levels, and could also improve the assessment of development indicators like poverty levels.
“If CPI volatility declines, it means that fiscal expenditure volatility, such as Dearness Allowance (DA) fixation, inflation-indexed bonds, and the like, which are linked to CPI, could also become more stable, predictable, and reliable, and this could give better budget predictability and visibility as well to fiscal numbers,” he said.
Nageswaran said the poverty estimates become more accurate since real consumption and real income calculations depend directly on CPI.
“Improved cost of living measurement also enhances the targeting efficiency of welfare schemes, ensuring that benefits, subsidies, and social transfers are better aligned with actual regional price realities,” he said.
India’s retail inflation eased to 2.75 per cent in January 2026 based on the newly introduced Consumer Price Index (CPI) series with base year 2024.
In a significant methodological overhaul, MoSPI revised the CPI base year from 2012 to 2024, using data from the Household Consumption Expenditure Survey (HCES) 2023-24.
The revised CPI adopts the international COICOP 2018 framework, expanding classification from 6 groups to 12 divisions, 43 groups, and 358 items, enhancing granularity and global comparability.
. VK SQ PRS