The Consumer Price Index (CPI), with the new base year 2024, will increase marginally by 20-30 bps and in the months when food inflation is higher, the new CPI will be low by 20-30 bps, according to an SBI Research report.
The government had formed an expert group to measure CPI accurately, with the changing consumption behaviour of the households and to incorporate latest global best practices including methodological developments.
The first CPI series based on new base year 2024, will release on February 12, with indices data from January 2025 onwards and inflation data for January 2026. The All-India level back series for the Rural, Urban, and Combined sectors, from January 2013 onwards, will also be released on February 12
“By considering the new weights on unchanged index we have calculated new CPI with old indices and found that overall CPI will increase marginally by 20-30 bps. While, in the months when food inflation is higher, the new CPI will be low by 20-30 bps,” said the report.
The price data will be collected from 1,465 rural markets and 1,395 urban markets across 434 towns. Total number of weighted items in this basket will be 358. Among these items, goods will increase from 259 to 314 and services from 40 to 50 items.
To enhance credibility and to ensure global comparability of Indian CPI, the latest structure of Classification of Individual Consumption According to Purpose (COICOP) 2018 will be adopted in the CPI 2024 series, according to the expert committee recommendations.
“To verify rural and urban samples, identification of markets, shops and mapping of item identification, a de novo market survey will be conducted. The practice of mapping reserve shops in CPI may be dis- continued,” according to the report.
To capture price movements on the e-commerce platforms, 12 online markets/towns (having more than 25 lakh population) will be added in CPI 2024 series. The prices of items will be collected through online/e-commerce platforms on weekly basis, it added.
Since prices of rail fare, postal services and fuel (petrol, diesel, LPG, CNG & PNG) are centrally determined, price collection and compilation will be done by PSD. Price collection of telecom services and online media services (OTT) will be done centrally by PSD through the online sources.
Moreover, airfare for the international direct routes are incorporated into the price collection framework in CPI 2024.
In case of gold and silver jewellery, the Group recommended to adopt the approach of defining standard jewellery items that are likely to be available consistently in the market, rather than attempting to price customised pieces. Accordingly, prices of basic and simple gold and silver jewellery such as bangles, necklaces, and rings will be collected.
