Why in News?
The Ministry of Statistics and Programme Implementation (MoSPI) is undertaking a base revision of the Consumer Price Index (CPI) from 2012 to 2024, aligning the index with changing consumption patterns and improving data collection methods.
What is CPI?
- The Consumer Price Index (CPI) measures changes in prices of goods and services consumed by households.
- It is the primary measure of inflation in India.
- Used by the Reserve Bank of India (RBI) to guide monetary policy decisions such as interest rates.
- Forms the basis for:
- Dearness Allowance (DA) revisions
- Wage adjustments
- Social security benefits
Why Base Revision is Needed
- Since 2012, India’s economy has changed significantly:
- Increased urbanisation
- Expansion of services sector
- Rise of digital platforms and online purchases
- Diversified household spending patterns
- Inflation measurement must reflect current consumption realities, not outdated baskets.
Key Features of CPI 2024 Series
- Updated Consumption Basket
- Based on the Household Consumption Expenditure Survey (2023–24).
- Higher weight to items with increased spending.
- Reduced weight to items with lower spending share.
- Greater representation of services and lifestyle-related expenditure.
- Improved Methodology
- Alignment with international statistical standards.
- Retains India-specific features for domestic relevance.
- Enhanced Data Collection
- Continued traditional market surveys for essentials.
- Inclusion of online prices (telecom services, airfares, etc.).
- Use of computer-assisted price collection to reduce errors and enable real-time validation.
- Integration of Administrative Data
- Greater reliance on official sources for:
- Rail fares
- Postal charges
- Fuel prices
- Public Distribution System (PDS) items
- Improves accuracy and reduces survey bias.
- Greater reliance on official sources for:
