The way of measuring inflation in India is now going to change. The government is preparing to introduce the Consumer Price Index with a new base year. Till now, inflation was calculated taking 2012 as the base, but in the last decade, people’s lifestyle, spending patterns and needs have changed so much that the old scale was not able to reflect the reality properly. For this reason, the government has decided to change the base year of the Consumer Price Index to 2024. The new consumer price index will come into effect from February 12, 2026, and on the same day, retail inflation data for January 2026 will be released under the new framework.
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The number of products and services will increase
The number of goods and services included in the index will also increase. While currently there are around 299 items, their number will increase to 358 in the new structure. This is likely to make the inflation calculations more detailed and closer to actual expenditure. The government and experts believe that the new consumer price index will not only better reflect the changing needs of the common man, but will also give more accurate signals to the Reserve Bank of India in deciding monetary policy. Decisions related to interest rates can now be taken on the basis of more robust data. The new index is being considered as a step to reflect the changing economy.
Data will be taken from e-commerce
Changes are also being made in the method of collecting data. Now prices will also be collected from e-commerce platforms. Prices of air fares, electricity rates and online services will be recorded in more regular and modern ways. This will increase the credibility of the data and the index will be closer to the real market.
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The index will include actual spending
The biggest feature of the new index is that it now includes those goods and services on which the common man is actually spending today. In the digital age, smartphones, internet and online services have become a part of life, but their impact in the old consumer price index was very limited. Now modern items like smartphones, wireless earphones, fitness bands will find a place in the inflation calculation. Along with this, OTT platforms like Netflix and other digital subscription services are also being included in it.
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App-based taxi services like Uber and Ola, prices of online shopping and international air fares will also now be counted in the inflation figures. If the prices of these services increase or decrease, its effect will be directly visible on the index. Rent in rural areas is also being included for the first time. On the other hand, older items that are almost no longer in use, such as video cassette recorders or audio cassettes, have been removed from the list.
Surcharge on food items will be reduced
Another big change is regarding the weight of food items. The share of food and beverages in the old index was about 46 percent, which will now come down to about 36–37 percent. Its purpose is that inflation figures should not go up or down excessively just because of fluctuations in the prices of vegetables or grains. Now the impact of services and non-food items will be more visible in the index than before, which will make the inflation picture balanced.
