Kolkata: To measure retail inflation more accurately and in a manner which reflects the changing lifestyle of the average Indian more faithfully, the base year of the CPI (Consumer rice Index) as been changed from 2011-12 to 2023-24. The first CPI_2024, will release on Feb 12. It will feature indices data from Jan 2025 onwards and inflation data for January 2026. The all-India level back series for the rural, urban and combined sectors will also be announced on Feb 12.

The point to remember is that inflation is no esoteric exercise. Its calculation directly has a bearing on the monetary policy of our country, which, in turn, determines whether you have to pay a higher interest (or lower) for your loan, whether you can get a loan relatively easily in the first place and even how healthy your monthly income actually is.

How many items in how many groups

The inflation basket is huge. According to the new structure, CPI 2024 series will feature 358 items each carrying different weights. These will be mapped to 12 divisions, 43 groups, 62 classes and 192 sub-classes. This has been done with the Classification of Individual Consumption According to Purpose (COICOP) 2018 classification, SBI Research has said in a note.

“By considering the new weights on unchanged index we have calculated New CPI with old indices and found that overall CPI will increase marginally by 20-30 bps. While, in the months when food inflation is higher, the new CPI will be low by 20-30 bps,” said SBI Research in a note. Let’s have a quick look at how the new broad items in the basket stack up. The old weights pertain to the 2012 series.

Food and beverages

Old Weight: 45.86

New Weight: 36.75

Pan, tobacco and intoxicants

Old Weight: 2.38

New Weight: 2.99

Clothing and footwear

Old Weight: 6.53

New Weight: 6.38

Housing, water, electricity, gas and other fuels

Old Weight: 16.91

New Weight: 17.66

Furnishings, household equipment and routine household maintenance

Old Weight: 3.80

New Weight: 4.47

Health

Old Weight: 5.89

New Weight: 6.10

Transport, Information and Communication

Old Weight: 8.59

New Weight: 12.41

Recreation, sport and culture

Old Weight: 1.68

New Weight: 4.86

Education services

Old Weight: 4.46

New Weight: 3.33

Personal care, social protection and miscellaneous goods and services

Old Weight: 3.89

New Weight: 5.04

(Source: SBI Research)

It is clear from the above table that the weightage of three items have gone down. These are Food and beverages, Clothing and footwear and Education services.