Food's weight in new CPI: a 9 percentage point fall

A new Consumer Price Index (CPI) series, using 2024 as the base year, is scheduled for release on Thursday. Ministry of Statistics and Programme Implementation Secretary Saurabh Garg speaks to Kuldeep Singh about the salient features of the new series. Excerpts:

- SAURABH GARG, SECRETARY, MINISTRY OF STATISTICS AND PROGRAMME IMPLEMENTATION

With the existing CPI series concluding and the new series commencing soon after, what bridging measures will ensure a smooth transition for users?

To ensure continuity and analytical consistency, the CPI 2024 series will be released along with back-series data at all India level for general indices. In addition, a linking factor bridging the two series will be released to facilitate a smooth transition for users and enable comparison across the old and new series.

Food and beverages’ weight declines to about 36.75% from 45.86% in the new series. How is this expected to affect headline inflation volatility?

This difference largely arises from a misinterpretation of the numbers. It is correct that in the 2012 series, the share of food and beverages was 45.86%. It is to clarify that if the old classification system were followed, the share of food and beverages would have declined from 45.86% to 40.10%.