"Base year for GDP, CPI & IIP set to change; CPI basket to expand"

Base Year Revision 

• India is revising the base year for:

  • GDP → New base: FY23

  • IIP (Index of Industrial Production) → Tentative base: FY23

  • CPI (Consumer Price Index) → New base year: 2024

Timeline of New Series

• GDP new series: To be released on February 27, 2026

• Revised IIP: To be released from 2026-27

• New CPI series: Expected from Q1 of 2026

CPI Base Year Change

• Last revised in 2015, from 2010 to 2012

• Old CPI basket used Consumer Expenditure Survey (CES) 2011-12, NSS 68th Round

• New CPI basket will use data from HCES 2023–24 (Household Consumer Expenditure Survey)

Changes in CPI Basket

• Current CPI basket includes few hundred items

• New basket to include around 407 items

• Weighting diagram being prepared from HCES 2023–24 data

• Exact weights and additions in the basket not finalised yet

Purpose and Use of CPI

• Originally used to adjust wages of workers based on cost of living

• Now a macro-economic tool for:

  • Inflation targeting by RBI

  • Price stability monitoring

  • Policy guidance

  • Deflator for real GDP estimation

Other Observations

• No clarity on whether food will be removed from inflation targeting (as suggested in Economic Survey 2023-24)