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New CPI Base Year May Push Inflation Up 20-30 bps, Says SBI Report

A report by SBI Ecowrap states that revising the Consumer Price Index base year to 2023-24 may marginally increase overall inflation by 20-30 basis points. The new CPI 2024 series reflects significant shifts in weightage, with food and beverages seeing a reduction and transport witnessing a sharp increase. The first official data release for the new series is scheduled for February 12, 2026. These changes aim to better capture evolving household consumption patterns and align with global best practices.

Key Points: CPI Base Year Revision to Impact Inflation: SBI Report

  • New CPI base year is 2023-24
  • Food weight reduced, transport weight increased
  • First CPI 2024 data release in Feb 2026
  • Inflation measurement to be more accurate
2 min read

CPI base year revision may push overall inflation up by 20-30 bps: SBI report

SBI report says new CPI base year may raise overall inflation by 20-30 bps, with first data release set for 2026. Details on weight changes inside.

"overall CPI will increase marginally by 20-30 bps - SBI Ecowrap report"

New Delhi, January 30

After the revision of the Consumer Price Index base year, overall CPI inflation is expected to rise marginally by 20-30 basis points, according to a report by SBI Ecowrap.

The report stated that applying the new weights to the unchanged index results in a marginal increase of approximately 20-30 bps in overall inflation.

However, it also highlighted that in months when food inflation is higher, the new CPI could be 20-30 bps lower than the earlier series.

It stated "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".

The findings come in the backdrop of the revision of the CPI base year to 2023-24 from 2011-12. To ensure a more accurate CPI measurement that reflects changing household consumption behaviour and incorporates global best practices and methodological developments, the Ministry of Statistics and Programme Implementation (MOSPI) had constituted an expert group. The recommendations of this expert group were released on Thursday.

According to the report, the expert group has detailed the entire process followed for the base revision exercise. It also outlined the enhancements and modifications introduced in the new CPI series, referred to as CPI 2024, along with comprehensive recommendations.

The new CPI 2024 series will consist of 358 weighted items. These items are mapped across 12 Divisions, 43 Groups, 62 Classes and 192 Sub-classes.

The report further noted that the first CPI 2024 data release will take place on February 12, 2026. This release will include index data starting from January 2025 onwards and inflation data for January 2026.

In addition, the All-India level back series for Rural, Urban and Combined sectors, starting from January 2013, will also be released on the same date.

The revision has also led to notable changes in the CPI's weight structure at the All-India (Combined) level. Under the old 2012 series, the weight of food and beverages stood at 45.86, which has now been reduced to 36.75 in the new 2024 series. Housing, water, electricity, gas and other fuels saw an increase in weight from 16.91 to 17.66, while transport, information and communication rose sharply from 8.59 to 12.41.

Other categories such as health increased from 5.89 to 6.10, furnishings and household maintenance from 3.80 to 4.47, and personal care, social protection and miscellaneous goods and services from 3.89 to 5.04.

The report noted that these changes reflect evolving consumption patterns and are expected to improve the accuracy of inflation measurement going forward.

- ANI

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Reader Comments

P
Priya S
The reduction in weight for food & beverages from 45.86 to 36.75 is quite significant. It shows our consumption is shifting towards services like transport and communication. Makes sense with more people ordering online and using apps for everything.
S
Sarah B
As someone who works in data analytics, this is a necessary and positive step. Updating the base year from 2011-12 is long overdue. Consumption patterns have changed dramatically in over a decade. This should lead to more accurate policy decisions.
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Aman W
Wait, the first data release is in Feb 2026? That's two years away! By then, the ground reality might be completely different. Hope this delay doesn't mean our current inflation figures are based on outdated assumptions.
K
Karthik V
The sharp rise in weight for transport and communication (8.59 to 12.41) hits home. Petrol prices, metro fares, and mobile/data bills are a huge chunk of my monthly expense now, much more than they were in 2012. The index is finally catching up.
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Meera T
While the technical update is good, I respectfully think the communication around this is poor. Most people won't understand '20-30 bps increase'. Just tell us clearly - will our cost of living calculation change, and how will it affect interest rates?

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

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