More Stories

Informist, Friday, Jan. 30, 2026

 

By Shubham Rana

 

NEW DELHI – The updated weights of the proposed Consumer Price Index released Thursday show that retail inflation is likely to be higher in the new series, economists said. However, the picture would become clear when official data, due Feb. 12, discloses the base year prices of items newly included in the price index.

 

The Ministry of Statistics and Programme Implementation Thursday released the weights of the new CPI series. The new CPI series with 2024 as the base year will track prices of 358 items, far more than the 299 tracked by the previous series, which has 2012 as the base year.

 

The new CPI series will see a substantial reduction in the weightage of 'food and beverages' to 36.8% from 45.9% in the old series. The weights of non-food and non-fuel items, or items that make up core inflation, will increase in the 2024 CPI series. Economists said the weight for core inflation would now be around 55-57%, up sharply from 47% in the old series.

 

"There is a significant reduction in food while the core basket weight is higher. Some of the categories have been changed in terms of bucketing," said Sakshi Gupta, principal economist at HDFC Bank. "Prima facie, it seems that the inflation number would be higher than currently estimated. Although, this is an incomplete picture because the base year (prices) also need to change which could change the indexes in the final CPI number."

 

The weight of food items going down and core inflation items going up would lead to a less volatile headline inflation, economists said. In the past, inflation has risen sharply, mainly because of higher vegetable prices such as onion or tomato.

 

CPI inflation rose to a three-month high of 1.33% in December from 0.71% in November. Inflation has declined in 2025-26 (Apr-Mar) because of favourable base effects and lower food prices. Core inflation, meanwhile, was at a 28-month high of 4.6% in December. Core inflation has risen in recent months mainly because of higher prices of gold and silver.

 

CPI inflation for December was around 2?sed on the rejig of weights across categories against the actual print of 1.3% even as both food and core inflation would have been similar individually, said Abhishek Upadhyay, senior economist at ICICI Securities Primary Dealership. "However, this is simplistic because new items have been added and that data will be used to estimate inflation. Updating of sample and changes in methodology such as for estimating housing CPI will also impact the inflation data," Upadhyay said.

 

State Bank of India estimated that overall CPI inflation will increase marginally by 20-30 basis points considering the new weights but on an unchanged index. "While, in the months when food inflation is higher, the new CPI will be low by 20-30 bps," the bank said in a report.

 

The new series will have 12 divisions and 43 groups in accordance with the Classification of Individual Consumption According to Purpose 2018, against six groups in the old series. The first release of the new CPI series will provide indices from January 2025 onwards and inflation data for January 2026. The ministry will also provide back series data for inflation for rural sector, urban sector, and combined sectors from January 2013.

 

IDFC FIRST Bank Chief Economist Gaura Sen Gupta said CPI inflation in the current year could be 50 bps higher based on the new weights. She sees FY26 CPI inflation at 2.5?sed on the new weight against 2.0% as per the old CPI series. For FY27, she sees CPI inflation at 4.1%, 10 bps higher than previously projected.

 

"(A) Fall in weight of food CPI is on the higher side compared to expectation, and that is mainly on account of cereals and prepared meals, and especially the latter," Upadhyay of ICICI Securities Primary Dealership said. "Food inflation should not be materially different in the new series and would be less volatile given lower weights for vegetables, and oils and fats segments."

 

On the core inflation side, the weight for transport and communication services and recreation and amusement categories are sharply higher in the new series. Weight for housing is expectedly higher, rising by more than two percentage points. The housing index will include rural housing for the first time and exclude government-provided houses. These changes should help provide a more accurate picture of housing inflation, economists said.

 

"Broadly, the bias is that core inflation will be higher in the new series because of better capturing of rental inflation even as impact of new categories such as restaurant services that have big weight is not clear," Upadhyay said.

 

While inflation is seen higher in the new series based on the updated weights, the Reserve Bank of India's Monetary Policy Committee is unlikely to take it into account at the February meeting, economists said, since CPI data will be released almost a week after the MPC's rate decision.  End

 

Edited by Akul Nishant Akhoury

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

 

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2026. All rights reserved.