Consumer Price Index (CPI)

A fixed shopping list, priced again and again

Picture a fixed shopping list. It has rice, vegetables, rent, fuel, school fees, and hundreds of other everyday items. The Consumer Price Index (CPI) prices that same list every month. It then compares the total cost to a fixed starting point.

India’s National Statistical Office (NSO) compiles CPI every month. It works under the Ministry of Statistics and Programme Implementation. NSO publishes three versions: Rural, Urban, and Combined. The Combined figure is the one most commonly quoted as “India’s inflation rate.”

Worked example: Say the basket cost ₹10,000 in the base year, and today the same basket costs ₹10,500. The CPI has risen from 100 to 105. That 5-point rise means prices, on average, went up 5% since the base year.

Real field visits, real weights

NSO field staff visit selected markets and villages every week. They collect real prices in person, not estimates. Each item in the basket gets a weight. That weight is based on how much of a typical household’s spending goes toward it.

Food and beverages carry the largest single weight in India’s CPI basket. That’s because food is where most Indian households spend the biggest share of their income. Housing, fuel, clothing, and other categories make up the rest.

Worked example: Say petrol prices double, but petrol is only 2% of the average household’s spending. That jump barely moves the overall CPI. Now say rice prices rise 10%, and rice makes up 8% of spending. That has a bigger effect. Weights decide how much any single price change actually matters.

What a shopper pays, versus what a producer sells for

CPI measures prices a retail buyer actually pays — the shopper at the market. WPI (Wholesale Price Index) measures a different stage. It tracks wholesale, producer-level prices, before goods ever reach a retail shelf. The two can move differently in the same month.

This is exactly why the RBI’s Monetary Policy Committee targets CPI, not WPI. CPI reflects what households actually experience day to day, which is what monetary policy ultimately cares about.

A base-year revision, nearly a decade in the making

On 12 February 2026, MoSPI released a new CPI series. Its base year is 2024=100, replacing the old 2012=100 series. The revision draws on the Household Consumption Expenditure Survey (HCES) 2023-24 — the first fresh spending-pattern survey in over a decade.

The new series also adopts an international classification standard (COICOP 2018), organising spending into 12 broad categories. Early data under the new base showed January 2026 inflation at about 2.75% (provisional), year-on-year.

Figures current as of the February 2026 base-year revision — re-verify against the latest MoSPI release before citing exact weights or recent inflation numbers.