India to Revamp Inflation Measurement Framework with New CPI Series

India is preparing a significant overhaul of its inflation measurement framework, with the Statistics Ministry set to launch a new Consumer Price Index (CPI) series in 2026. The revision comes after years of debate on whether the current CPI adequately reflects modern consumption patterns and inflation drivers.

The new framework will reduce the weightage of food items, which currently dominate the CPI basket, and increase representation for housing, services, and digital economy-related expenditures. This shift is expected to provide a more balanced view of inflation, especially as urban consumption and service-sector spending rise.

The Reserve Bank of India (RBI) has also reviewed its flexible inflation targeting framework, with the current 4% CPI target (within a 2–6% band) set to expire in March 2026. Policymakers emphasize that credibility and investor confidence must be maintained while adapting to new measurement standards.

Key Highlights:

• New CPI Series: Launch planned for 2026 with updated consumption basket.
• Food Weightage: Reduced to reflect diversified spending patterns.
• Services & Housing: Greater emphasis in the revised index.
• Policy Impact: RBI’s inflation targeting framework under review alongside CPI changes.
• Global Context: Aligns India’s inflation metrics with international best practices.

This reform marks a crucial step in modernizing India’s economic indicators, ensuring inflation measurement remains relevant to changing consumption trends.

Sources: Economic Times, Indian Express, Milli Chronicle