MEASURING REAL INFLATION

Every year, inflation figures are announced with reassuring precision, often suggesting that price rise remains contained.

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Yet across Indian households, the lived experience tells a more complicated story. Families find themselves reworking budgets, postponing purchases, or dipping into savings to meet routine expenses. Rent inches upward without pause, school fees arrive with annual revisions, healthcare costs rarely retreat, and a growing list of small but unavoidable digital payments — from data plans to streaming subscriptions — quietly reshapes monthly spending. The tension between official inflation numbers and everyday financial strain is not merely perception. It reflects a deeper structural mismatch between what is measured and what matters most in contemporary household budgets.For years, India’s primary inflation gauge, the Consumer Price Index (CPI), relied on consumption patterns anchored to 2012. At that time, food dominated household expenditure, and services occupied a much smaller share of spending. ‘The economy has since undergone a profound shift. Rapid urbanisation, rising incomes, and changing aspirations have expanded the role of services in daily life. Housing, transport, healthcare, education, and communication now command a larger portion of household budgets than they did a decade ago. Yet inflation measurement continued to reflect an older economic reality. The result was not inaccurate data, but an incomplete representation — a statistical mirror that lagged