MoSPI Expands Inflation Calculation Methods: New Data Sources to Enhance Accuracy

Image Source : The Indian Express

The Ministry of Statistics and Programme Implementation (MoSPI) is set to revamp its approach to inflation measurement by incorporating alternative data sources. The initiative aims to refine the Consumer Price Index (CPI)based retail inflation series by leveraging digital platforms, including overthetop (OTT) services and online travel portals.

Key Highlights of MoSPI’s New Inflation Strategy

The ministry will integrate data from OTT platforms, air travel booking sites, and railway ticketing portals to enhance inflation calculations
Discussions are underway with IRCTC and the Petroleum Planning & Analysis Cell (PPAC) for direct data transfer on rail fares and fuel prices
The new CPI series, expected to launch in early 2026, will incorporate administrative records for petrol, diesel, and LPG pricing

Strategic Shift in Inflation Measurement

The move is designed to improve the accuracy of inflation tracking by utilizing realtime digital transactions
Alternative data sources will complement traditional surveybased methods, offering a more dynamic representation of price fluctuations
The initiative aligns with global trends in economic data collection, ensuring India’s inflation metrics remain relevant and precise

Industry Perspectives and Policy Considerations

NITI Aayog has raised concerns about whether MoSPI should be leading efforts in alternative data collection or if think tanks should take the lead
Experts suggest that satellitebased economic indicators, such as nighttime luminosity, could further refine inflation measurement
Policymakers are evaluating the feasibility of integrating frontier technologies into official statistics

Future Outlook and Implementation Plans

The ministry is expected to finalize its methodology and data partnerships by mid2025
The enhanced CPI series will provide policymakers with more granular insights into inflation trends
The initiative is poised to modernize India’s statistical infrastructure, ensuring more responsive economic policymaking

Sources: Financial Express, Indian Express, WN News.