CPI Inflation at 2.75% in January Under New 2024 Base Year Series, Remains Within RBI Target Band

India’s consumer price index (CPI) inflation for January was estimated at 2.75% under the first release of the revised 2024 base year series, marking a higher reading compared to the final print under the 2012-base framework.

Under the outgoing 2012 series, CPI inflation in December 2025 stood at 1.33%, with retail inflation showing signs of firming from November onward.

Data released by the National Statistics Office (NSO) under the Union Ministry of Statistics and Programme Implementation showed the CPI index rising sequentially to 104.46 in January, from 104.10 in December and 104.01 in November.

Food and Housing Inflation Trends

Food inflation in January was estimated at 2.13%, while housing inflation came in at 2.05%.

The government has not released comparable year-on-year component data under the revised series. However, index movements suggest a sequential easing in food prices.

Items recording lower inflation during the month included:

• Garlic

• Onion

• Potato

• Arhar and tur dal

• Peas

Meanwhile, higher inflation was observed in:

• Silver jewellery

• Tomato

• Coconut and copra

• Gold

• Diamond and platinum jewellery

• Coconut oil

Key Structural Changes in the 2024 CPI Series

One of the most significant revisions is the reduced weight of food and beverages in the CPI basket. Food weight now stands at 36.75%, down from 45.86% in the previous series.

At the all-India level:

• Goods in the basket increased from 259 to 308

• Services expanded from 40 to 50

New additions in the revised basket include:

• Rural housing prices

• Online media and streaming services

• Value-added dairy products

• Barley and related products

• Electrical storage devices such as pen drives

• Exercise equipment

The weights have been realigned using data from the Household Consumption Expenditure Survey 2023–24.

The ministry stated that the updated series better reflects current consumption patterns, income changes, urbanisation, service-sector expansion and digitalisation trends. The 2012-base CPI had served as a benchmark for over a decade before structural shifts necessitated revision.

Policy Implications

Chief Economic Adviser V. Anantha Nageswaran said the revised CPI basket would provide a more accurate inflation signal aligned with present economic conditions.

According to him, the lower food weight could reduce volatility caused by supply-side food shocks and allow monetary policy to focus more on demand-driven core inflation pressures.

Lower volatility may also:

• Anchor household inflation expectations

• Improve fiscal predictability

• Support calibration of dearness allowance revisions

• Enhance targeting of welfare programmes

Inflation Within RBI’s Target Band

January’s inflation reading remains within the Reserve Bank of India (RBI)’s 2–6% tolerance band.

Economists expect policy rates to remain steady.

• Upasna Bhardwaj of Kotak Mahindra Bank said the rate-cut cycle is likely over.

• Sujan Hajra of Anand Rathi Group expects inflation to edge higher as base effects fade.

• Ankita Pathak of Ionic Asset cautioned that a higher effective weight of imported consumption items could push inflation upward if the rupee remains under pressure.

Why the 2024 Base Year Matters

Base year revisions are designed to ensure inflation data reflects evolving spending habits. With consumption patterns shifting toward services and digital goods, the updated basket aims to improve measurement accuracy.

A lower food weight may lead to reduced CPI volatility over time — a factor that could meaningfully shape monetary policy decisions in the coming quarters.