Consumer price index (CPI) inflation for January, under the maiden print of the revised series with 2024 as the base year, is estimated at 2.75 per cent, marking a higher reading compared with the final print of the outgoing 2012-base series.
Under the old series, CPI inflation in December 2025 stood at 1.33 per cent, with retail inflation beginning to firm from November onwards.
The first readings of the new series mirror this trend, with the CPI index rising sequentially to 104.46 in January from 104.10 in December and 104.01 in November, according to data released by the National Statistics Office (NSO) under the Union Ministry of Statistics and Programme Implementation.
Food inflation for January was estimated at 2.13 per cent, while housing inflation was at 2.05 per cent. The government has not released comparable year-on-year inflation data for individual components under the revised series, though index movements indicate a sequential easing in food prices.
NSO data showed that garlic, onion, potato, arhar, tur dal and peas recorded the lowest inflation during the month, while silver jewellery, tomato, coconut-copra, gold, diamond and platinum jewellery, and coconut oil were among the items witnessing high inflation.
Policy implications
A key structural change in the revised CPI is the reduced weight assigned to food and beverages, now at 36.75 per cent compared with 45.86 per cent in the previous series.
At the all-India level, the number of goods in the basket has increased from 259 to 308, while the number of services has risen from 40 to 50. New inclusions in the 2024 series include rural housing prices, online media and streaming services, value-added dairy products, barley and its products, electrical storage devices such as pen drives, and exercise equipment.
Item weights have been realigned with household expenditure patterns captured in the Household Consumption Expenditure Survey 2023–24.
Explaining the rationale for the overhaul, the ministry said the revised CPI better reflects current consumption patterns, price structures and the evolving nature of the economy, marked by changes in income levels, urbanisation, expansion of services and digitalisation. The 2012-base series had served as a stable benchmark for more than a decade, but structural shifts warranted an update.
Chief economic adviser V. Anantha Nageswaran said the revised basket would provide a more accurate inflation signal aligned with prevailing economic conditions, improving the calibration of monetary and fiscal policies.
He said that with a lower food weight, inflation could be driven more by core components, enabling monetary policy to focus on demand pressures rather than supply-led food shocks. Lower CPI volatility could help anchor inflation expectations of households and improve predictability for fiscal outlays such as dearness allowance and inflation-indexed bonds, while also enhancing welfare targeting.
Within RBI’s range
January inflation remains within the Reserve Bank of India’s 2–6 per cent tolerance band, with economists expecting an extended pause in policy rates.
Upasna Bhardwaj, chief economist of Kotak Mahindra Bank, said the rate-cut cycle was likely over, while Sujan Hajra, chief economist and executive director of the Anand Rathi group, expects inflation to edge higher as base effects fade.
Ankita Pathak, head of global investments of Ionic Asset, said a higher effective weight of imported and household consumption items within CPI could put upward pressure on inflation if the rupee continues to remain under pressure.
