Press note on release of Expert Group Report on Comprehensive Updation of CPI

1. At a Glance

• The Ministry of Statistics and Programme Implementation (MoSPI) released the Expert Group Report on Comprehensive Updation of the Consumer Price Index (CPI) on 29 January 2026, paving the way for a new CPI series with base year 2024=100, replacing the existing 2012=100 series [S1][S2].
• The exercise re-engineers India's headline retail inflation measure — the same metric RBI uses to anchor its 4% (±2%) flexible inflation-targeting mandate — making it a high-yield Prelims + GS-III topic [S2].

2. Why in the News

• 29 Jan 2026: MoSPI released the Expert Group Report and a FAQ document on CPI 2024 series [S1][S3].
• 12 Feb 2026: First CPI release on the new base 2024=100 scheduled [S1][S4].
• Part of a broader statistical refresh — new GDP series on 27 Feb 2026 and revised IIP in May 2026 [S4].

3. Background & Evolution

• CPI base-year revisions (chronological): 1982 → 2001 → 2010 (CPI-IW) ; CPI (Combined/Rural/Urban) launched Jan 2011 with base 2010 → revised to 2012=100 in 2015 → CPI 2024=100 (2026) [S1].
• The Expert Group was constituted by MoSPI with members drawn from eminent academic institutions, senior officers of the Reserve Bank of India and Government of India [S1].
• Rationale: capture changed consumption patterns (post-COVID, digital, services), align with global best practices (COICOP 2018), and incorporate the latest Household Consumption Expenditure Survey (HCES) 2022-23 / 2023-24 data [S1][S3].

4. Core Static Facts

• Nodal ministry: Ministry of Statistics & Programme Implementation (MoSPI); compiled by the National Statistical Office (NSO) [S1].
• New base year: 2024 = 100 (replacing 2012=100) [S1].
• Weight reference period: 2023-24 [S1].
• Source for weights: NSSO's Household Consumption Expenditure Survey (HCES) [S3].
• Classification framework: COICOP 2018 (Classification of Individual Consumption According to Purpose, a UN Statistics Division standard) [S1].
• Item basket structure (CPI 2024): 358 weighted items, mapped to 12 Divisions, 43 Groups, 62 Classes, 192 Sub-classes [S1].
• Sub-indices retained: CPI-Rural, CPI-Urban, CPI-Combined (separate from CPI-IW maintained by Labour Bureau) [S1].
• Used by RBI: CPI-Combined is the nominal anchor under the Flexible Inflation Targeting (FIT) framework (RBI Act amendment, 2016) — target 4% ±2% [S2].

5. Multi-Dimensional Analysis

Economic

• Re-weighting based on HCES 2022-23/2023-24 will likely reduce the food group weight (currently ~45.86% in CPI-C 2012) reflecting Engel's law as incomes rise, raising the share of services, health, education, transport [S3].
• A lower food weight will dampen headline CPI volatility from food shocks — directly altering RBI's monetary policy reaction function [S2].

Scientific / Methodological

• Adoption of COICOP 2018 (12-Division UN classification) gives India full international comparability with OECD and IMF dissemination standards [S1].
• Expansion to 358 items improves representativeness of modern consumption (digital services, OTT, online platforms) [S1].

Administrative / Governance

• Synchronised statistical overhaul: new GDP base series (27 Feb 2026), CPI (12 Feb 2026), IIP (May 2026) — addresses long-standing criticism of stale base years [S4].
• Builds on recommendations of earlier statistical reform reports (Rangarajan, NSC).

Federal / Data Architecture

• Price data collection spans rural & urban centres across all States/UTs; field work by NSO with NSSO-trained price collectors [S1].

6. Recent Developments (last 12-18 months)

• 29 Jan 2026 – Expert Group Report on Comprehensive Updation of CPI released [S1].
• 29 Jan 2026 – FAQ on CPI 2024 series issued by MoSPI [S3].
• 12 Feb 2026 – First CPI release on base 2024=100 scheduled [S4].
• 27 Feb 2026 – New GDP series release scheduled [S4].
• May 2026 – Revised IIP series scheduled [S4].

7. Prelims Hooks

• New CPI base year: 2024 = 100 (replaces 2012=100) [S1].
• Weight reference period for CPI 2024: 2023-24 [S1].
• Weights sourced from: Household Consumption Expenditure Survey (HCES) of NSSO [S3].
• Classification system adopted: COICOP 2018 (UN standard) [S1].
• Number of weighted items in new basket: 358 [S1].
• COICOP hierarchy in CPI 2024: 12 Divisions, 43 Groups, 62 Classes, 192 Sub-classes [S1].
• Nodal ministry: Ministry of Statistics & Programme Implementation (MoSPI) — NOT Ministry of Finance or RBI [S1].
• Expert Group included experts from academic institutions, RBI, and GoI [S1].
• CPI-Combined is the anchor for RBI's Flexible Inflation Targeting (4% ± 2%) under the RBI Act (amended 2016) [S2].
• First CPI release on new base: 12 February 2026 [S4].
• CPI-IW (for industrial workers) is compiled by Labour Bureau, distinct from MoSPI's CPI (R/U/C) [S1].
• New GDP series release date: 27 February 2026 [S4].

8. Mains Relevance

• GS-III — Indian Economy: "Growth, Development… Inflation"; statistical infrastructure.
• GS-II — Governance: data-driven policymaking, institutional reform.
• Possible question stems: 1. "The revision of the CPI base year to 2024 is as much a monetary-policy event as a statistical exercise. Discuss." (GS-III) 2. "Examine the methodological enhancements introduced in the CPI 2024 series and their implications for inflation targeting in India." (GS-III) 3. "Frequent base-year revisions of macro-statistics (CPI, GDP, IIP) are essential for evidence-based policy. Analyse the institutional challenges." (GS-II/III)

9. Related Topics to Study Next

• Flexible Inflation Targeting (FIT) & MPC — CPI is the anchor variable [S2].
• HCES 2022-23 / 2023-24 — provides the weights for the new CPI [S3].
• GDP Base Year Revision 2024 series (release 27 Feb 2026) — twin reform [S4].
• CPI-IW & WPI — distinguish indices, base years and custodians.
• COICOP 2018 (UN SNA-linked) — international classification system [S1].
• National Statistical Commission (NSC) & MoSPI restructuring — institutional context.
• Engel's Law & food share in CPI — analytical link to weight changes.
• Producer Price Index (PPI) — India's pending shift from WPI to PPI.

10. Common Errors / Trap Areas

• Confusing CPI (Combined/Rural/Urban) — MoSPI with CPI-IW — Labour Bureau; only CPI-C anchors RBI's FIT.
• Mixing up base year (2024) with weight reference period (2023-24) — they need not be identical.
• Misattributing the report to RBI or Finance Ministry; it is MoSPI's Expert Group.
• Believing WPI is RBI's inflation anchor — it is CPI-Combined since the 2016 RBI Act amendment.
• Confusing COICOP 2018 with NIC/NPC; COICOP is a UN consumption classification.

11. Sources

• [S1] Press note on release of Expert Group Report on Comprehensive Updation of CPI — https://www.mospi.gov.in/uploads/latestReleases/latest_release_1770883460387_d9e6cebb-1e59-4528-b57e-21a67d964dc6_Press_note_on_release_of_Expert_Group_Report_on_Comprehensive_Updation_of_CPI-reg_(1)_(1).pdf — (tier: 1)
• [S2] PIB — Press note on release of Expert Group Report on Comprehensive Updation of CPI — https://www.pib.gov.in/PressReleasePage.aspx?PRID=2220040 — (tier: 1)
• [S3] FAQs on CPI 2024 Series (Annexure V), MoSPI — https://www.mospi.gov.in/uploads/documents/documents/1770891066052-Annexure_V.pdf — (tier: 1)
• [S4] PIB — Release schedule of new series of GDP, CPI and IIP — https://www.pib.gov.in/PressReleseDetailm.aspx?PRID=2226269 — (tier: 1)