Discuss the rationale and methodological changes involved in revising India's CPI base year from 2012 to 2024. How do these changes improve the representativeness of inflation measurement?

The Consumer Price Index (CPI), compiled by the NSO under MoSPI, anchors the RBI's flexible inflation-targeting framework. Its base was updated from 2012=100 to 2024=100, first released for January 2026 [2], to realign a decade-old basket with today's consumption reality.

Rationale for revision

• Outdated weights: the 2012 basket, built on 2011-12 spending, no longer mirrored a more urbanised, services-driven, digitally-consuming economy.
• Structural shifts: rising incomes altered food-versus-non-food shares, distorting the true cost of living.
• Global comparability and periodic (roughly five-yearly) recalibration of statistical infrastructure.

Methodological changes

• New weighting base: item weights drawn from the Household Consumption Expenditure Survey (HCES) 2023-24 [1].
• COICOP 2018 classification adopted, replacing the old broad-group structure, aligning India with UN norms [1].
• Wider basket: weighted items expanded from 299 to 358 (goods 308, services 50) [1].
• CAPI (Computer Assisted Personal Interviewing) on tablets replaced paper schedules, adding real-time validation and monitoring [1].

Improved representativeness

• Fresh HCES weights capture current spending patterns, reducing basket bias [1].
• Broader goods-and-services coverage and expanded rural-urban markets better reflect diverse consumption [2].
• CAPI improves accuracy, timeliness and credibility of price data [1].

By grounding weights in recent survey evidence and modernising collection, the revised series yields a more faithful inflation gauge—strengthening monetary-policy transmission and welfare-linked indexation, and advancing the goal of an evidence-based statistical system.