India’s newly-introduced Consumer Price Index (CPI) series with 2024 as base year provides a richer and more policy-relevant dataset, capturing evolving consumption patterns, urbanisation trends and structural changes in the economy, according to a report by SBI Research.
The report noted that the revised CPI framework aligns closely with the international Classification of Individual Consumption According to Purpose (COICOP) 2018, enhancing the credibility of India’s inflation data and ensuring global comparability. Under the new structure, the CPI basket includes 12 divisions, 43 groups, 92 classes and 162 sub-classes, reflecting a more modern classification of household consumption.
A key change in the CPI-2024 series is the reduced weight of food and beverages, which now stands at 36.75 per cent, compared with 45.86 per cent in the 2012 series. The revision reflects a gradual shift in household spending patterns toward services and discretionary consumption.
At the same time, the weightage of transport, information and communication, and health has increased, indicating rising spending on mobility, digital services and healthcare. In rural areas particularly, the weight of transport and communication has risen sharply, nearly matching urban levels.
The updated weighting also alters the relative importance of states in the CPI basket. States such as Bihar and Tamil Nadu have seen an increase in weight, while Maharashtra and West Bengal have experienced declines.
Inflation trends vary significantly across states. For January 2026, most major states recorded CPI inflation below 3 per cent, though Telangana registered the highest inflation at about 4.9 per cent. Despite covering 358 items, the CPI basket remains concentrated, the report said.
About 50 per cent of the CPI weight is accounted for by just 26 items, while 90 per cent is covered by 148 items.This concentration can help policymakers and businesses focus on high-impact categories for inflation forecasting, corporate pricing strategies and scenario analysis, especially in the event of shocks such as rising rents, fuel prices or milk costs.
The new CPI series expands geographical coverage and consumption tracking. Compared with the previous series, 565 additional markets have been included, taking the coverage to 1,465 rural and 1,395 urban markets, along with 12 online markets to capture digital retail trends.