January inflation at 2.75%; overhauled CPI with base year 2024 kicks in

India’s retail inflation was recorded at 2.75 percent in January under the new Consumer Price Index (CPI) series with base year 2024, marking the first inflation print under the revised framework. The data, released on February 12, reflects significant changes in the way prices are measured, including a lower weight for food and a broader consumption basket.

Base year changes

This is the first major overhaul of the CPI in more than a decade, replacing the 2012 base year series. Under the old series, inflation had risen to 1.33 percent in December from 0.71 percent in November.

The new data show prices rising for three consecutive months. The CPI index moved up to 104.46 in January from 104.10 in December and 104.01 in November, indicating a gradual firming up in price pressures.

Food loses weight

One of the biggest changes in the revised series is the reduced weight of food. Food and beverages now account for about 37 percent of the index, down from around 45 percent earlier. As a result, non-food items now make up more than 60 percent of the basket.

Food inflation stood at 2.13 percent in January. Tomato prices surged 64.8 percent, while coconut and coconut oil prices remained in high double digits.

Personal care inflation was elevated at 19.02 percent, largely due to a sharp 160 percent rise in silver jewellery prices and a 47 percent increase in gold prices. Education services inflation was 3.35 percent, while restaurants and accommodation services recorded 2.87 percent.

Broader basket

The revised CPI now covers more than 350 items, up from 299 earlier. New additions include wireless earphones, pet food, sanitisers, fitness bands and air purifiers, reflecting changing consumption patterns.

Housing and utilities now carry a weight of 17.7 percent, health 6.1 percent, and transport and communication 12.4 percent, indicating greater emphasis on services and urban spending trends.