India’s Retail Inflation: New retail inflation data has been released for the month of January, in which the inflation rate has been recorded at 2.75 percent. The special thing is that this data has been prepared on the basis of the new series of Consumer Price Index (CPI). Now the basis of calculation has been changed from 2012 to 2024, due to which there has been a change in both the method and scope of inflation estimation.
Government made changes in the base year
In this new series released by the National Statistics Office (NSO) under the Ministry of Statistics and Program Implementation, several important amendments have been made keeping in mind the changing patterns of consumer spending. To present a more accurate picture of the price situation, the number of goods has been increased from 259 to 308, while the number of services has been increased from 40 to 50. Its purpose is to ensure that people’s actual consumption behavior is better reflected.
Food inflation in January stood at 2.13 percent, which is lower than the overall inflation rate. The new series includes rural house rent, online media services, fuels like CNG/PNG. Additionally, telephone charges, rail and air fares, postal charges, fuel and online streaming services like OTT subscriptions have also been included to make better use of the data available from digital and administrative sources. This change reflects the changing lifestyle of consumers and the increasing role of digital services.
RBI’s ‘stay’ on interest
For comparison, under the old series based on 2012, retail inflation in January 2025 was 4.26 percent, while it was 1.33 percent in December. It is natural to see differences in the figures of the new and old series due to change in the base year and restructuring of the basket.
Overall, the new CPI series is considered an important step towards making the measurement of inflation more comprehensive and in line with current consumption trends.
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