New Delhi, Feb 13 (IANS) As India launched the Consumer Price Index (CPI) series with 2024 as the base year, Chief Economic Advisor (CEA) V. Anantha Nageswaran has said the change better reflects household spending patterns, makes poverty estimates more accurate, adding that the new findings reveal income growth and productivity gains.

The new CPI series found rising service consumption, as the share of food in domestic budgets declined and more accurate data will help fiscal and monetary policy makers formulate better responses to evolving economic conditions, Nageswaran said.

CEA said the new series captures the transition in domestic budgets of food’s share moving to services such as health, education, mobility and connectivity is typically associated with income growth and productivity gains.

All-India CPI inflation rate in January stood at 2.75 per cent (year-on-year), with rural price rise at 2.73 per cent and urban inflation at 2.77 per cent. Food inflation, in negative territory till December 2025 under the old series, stood at 2.1 per cent in the new series.

“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.

Lower weightage for the otherwise volatile group of food and beverages may make the headline inflation less volatile, he noted.

“If CPI volatility declines, it means that fiscal expenditure volatility such as Dearness Allowance (DA) fixation, inflation-indexed bonds, 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 further pointed out.

The Ministry of Statistics and Programme Implementation (MoSPI) on Thursday released the first print of the revamped Consumer Price Index (CPI) series with base year 2024.

The earlier six-group classification was replaced with 12 divisions to align with international standards and uses the 'HCES 2023-24' for updating the household consumption basket.

The new basket expanded to 358 items from 299, with goods rising to 308 and services to 50, underscoring the growing role of services in household consumption.

Saurabh Garg, Secretary, Ministry of Statistics and Programme Implementation, said the government plans to do base revisions of CPI every five years, with the next household consumer expenditure survey scheduled for 2027‑28.

—IANS

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