Pushing back on the claims that the reduced weight of food and beverages in the new consumer price index (CPI) series would diminish the headline inflation during food price spikes, Ministry of Statistics and Programme Implementation (MoSPI) Secretary Saurabh Garg has said it would not be appropriate to make such an assessment. The primary objective of the CPI base revision is to develop a robust, transparent and representative index that accurately reflects price movement across time as per household consumption behaviour, he said.
“It would not be appropriate to make an assessment regarding the impact of the revised weights on inflation volatility,” the secretary said. He stressed that a lower food weight naturally means food price changes contribute less to the headline CPI movements during spikes, but this reflects updated expenditure realities.
Decoupling Volatility
The ministry will release the CPI data based on the new 2024 series on February 12, along with back-series data at the all-India level and a linking factor to enable seamless comparisons and transitions between the old (2012 base) and new series. The weight of food and beverages in the new series will be 36.7%, much below the 45.86% in the current series with 2012 as the base year. The weight of food, without beverages, in the new series will be 34.77%. Economists have projected that this will reduce food-led volatility in the headline inflation. The SBI Research had stated that in the months when food inflation is higher, the new CPI will be low by 20-30 basis points.
Global Standards
The MoSPI secretary explained that the decline to 36.75% partly results from adopting the international Classification of Individual Consumption According to Purpose (COICOP) 2018 framework, which features 12 divisions instead of the previous six broad categories. Certain expenditure items previously grouped under food and beverages now reclassified under categories such as “restaurants and services”, leading to a redistribution of weights across divisions.
If the old classification was retained for comparison, the food and beverages share would fall only to around 40.10% (from 45.86%). “As per the new classification, the share of food and beverages, which currently stands at 36.75% for 2024 series, would have been around 42.62% for the 2012 series,” Garg said.
The shift also captures real changes in household spending patterns from the latest Household Consumption Expenditure Survey (HCES 2023–24), including higher outlays on housing (now including rural housing), services, and transport, the secretary said. These updates, aligned with global standards, aim to make the index more representative rather than to understate pressures from food costs.