Jan retail inflation rises to 2.75%

BESIDES, HOUSING REPRESENTED by rents is added in a new category of “housing,water, electricity, fuel.”

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The food inflation for January came in at 2.13%, sharply up from(-)2.71% in December (old series). In January 2025, food inflation was recorded at 5.97%, but the relevant sub-index remained below the year-ago level for the seven months through December, representing a deflation phase.

CEA V Anantha Nageswaran said that the new CPI series provides policymakers with a more up-to-date basis for “assessing real incomes, consumption trends and purchasing power.” “Lower weighting for food and beverages may make headline inflation less volatile. Inflation could now become more driven by core (inflation) rather than food. By extending rent measurement to rural areas and improving sampling coverage, the CPI now (better) captures housing costs,” he said. Some categories gained prominence in the new index. Transport’s weighting rose by 2.41 percentage points, personal care by 1.03 pp, furnishings by 0.81 pp and housing by 0.78 pp, reflecting evolving consumption patterns as spending shifts towards services and discretionary goods. The revised basket also expands the precious metals segment to include diamonds and platinum jewellery alongside gold, replacing the earlier gold-heavy mix.

Key additions in the revised CPI are rural housing, online media service provider/streaming services, value added dairy products, barley & its products, pen drive & external hard disk, attendant, babysitter and exercise equipment. At the same time, obsolete items such as VCR/VCD/DVD players, hiring charges, radio, tape recorder, secondhand clothing, CD/DVD audio/video cassettes, and coir/rope were removed.