Government to Update Consumer Price Index Base Year to 2024 for Better Inflation Measurement
India is set to replace its outdated Consumer Price Index (CPI) dataset, which currently uses 2012 as the base year. The new series, starting February 2026, will use 2024 as the base year and incorporate updated weightages based on the Household Consumption Expenditure Survey 2023-24. The current 2012-based index fails to capture modern consumption patterns, leading to a gap between official inflation figures and the actual cost of living experienced by households. This update is crucial for more accurate policymaking and capturing the nuances of a diverse country like India.
Key Points
- The 2012 base year is over a decade old and does not reflect current spending on services, technology, and subsidies.
- Official retail inflation for December 2025 stood at 1.33%, while household perceptions were significantly higher at 6.6%.
- The new index will incorporate updated weightages for various sub-sectors based on the latest consumption patterns.
- Failing to capture accurate price rises can lead to policy decisions that do not align with ground realities.
Exam Facts
- Current CPI base year: 2012
- New CPI base year: 2024
- Household Consumption Expenditure Survey 2023-24
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