India’s measure of consumer inflation is slated for a major revision, with a proposal to revise the base year of the consumer price index (CPI) to 2024 from the current series of 2012, according to an Ecowrap report by SBI Research, citing recommendations of an expert panel constituted by the Ministry of Statistics and Program Implementation (MoSPI).

The revised CPI, with 2024=100 as the new base, aims to better reflect changing household consumption patterns, increased use of services and the growing role of digital platforms. The first release of the new CPI series is scheduled for February 12, 2026, along with a subsequent series for rural, urban and combined indices starting in January 2013, the report said.

One of the most significant changes is a sharp reduction in the weight of food and drink, which drops to 36.75% from 45.86% in the current series. This adjustment reflects the decline in the share of food in household expenditure as incomes rise. At the same time, the weights of transport, information and communication have increased to 12.41% from 8.59%, while leisure, sport and culture have more than doubled to 4.86%, indicating a structural shift towards service-based consumption.

The revised CPI basket will consist of 358 weighted items, mapped into 12 divisions, 43 groups and 62 classes, in line with the 2018 COICOP classification, improving global comparability. The number of goods items will increase to 314, while services will increase from 40 to 50 items, reflecting a broader coverage of modern consumer trends.

A key feature of the new framework is the inclusion of e-commerce pricing. The CPI 2024 series will collect weekly price data from 12 online markets in cities with populations above 25 lakh, enabling inflation data to capture digital retail behavior more accurately.

Several methodological updates have also been proposed. The panel recommended switching to the Jevons short index formula for the calculation of the elementary level index to improve quality adjustment and reduce reliance on base prices. Prices of centrally administered items such as fuel, rail fares and telecom services will be collected centrally, while electricity prices will be reflected in four consumption slabs.

For precious metals, the CPI will move away from pricing personalized jewellery, instead tracking standardized gold and silver items such as bracelets, rings and necklaces to ensure consistency. Employer-provided accommodation and free social transfers will be excluded from the index.

SBI Research estimates that applying the new weightings to unchanged price indices would result in a marginal increase in headline CPI inflation of 20 to 30 basis points on average, while during periods of high food inflation headline CPI could be 20 to 30 basis points lower. This suggests that the revised CPI may provide a more stable and representative inflation signal for policymakers and markets.

The revamp is expected to improve the accuracy, credibility and policy relevance of India’s inflation data as consumption patterns continue to evolve rapidly.