India's inflation index to be revised every 5 years: Saurabh Garg

Saurabh Garg, secretary in the Ministry of Statistics and Programme Implementation (Mospi), said that India's inflation index would be revised every five years. He said that the Consumer Price Index (CPI) series revision would be done within five years, according to a report by The Economic Times. He was speaking at a seminar organised by the Centre for Social and Economic Progress on Wednesday.

 

Garg further added that the Household Consumption Expenditure Survey (HCES) will be done in three years. HCES is a large-scale survey conducted by the National Statistical Office (NSO). It is one of the most important tools for understanding how households spend money.

 

The new CPI series will be released by Mospi in the first quarter of 2026, with 2024 as the base year. Currently, the base year is 2012, and the weight of the items is based on HCES 2011-12, the report said.

New CPI series to incorporate ecommerce data

While HCES 2022-23 data was supposed to be used by the government to update weights for the new series, a shift to HCES 2023-24 is highly possible, given that the data is more recent. The new CPI series will also incorporate ecommerce data. 

 

The weighting for food and beverages was 45.86 per cent in the latest CPI, representing a significant portion of the index basket. This share is likely to decline with changing consumption patterns, the report said.

 

The move assumes significance as CPI is used to measure inflation. If the new basket has higher weights on items with slower price rise, measured inflation may go down or vice versa.

 

Combined CPI is also used as the inflation target benchmark for the Reserve Bank of India's monetary policy. A revision affects how inflation is read, which can influence interest rate decisions.