4 min readNew DelhiFeb 14, 2026 04:43 AM IST
India finally has a brand-new Consumer Price Index (CPI) basket that uses a fairly recent year, 2024, as the base for prices, besides considering the prices of goods and services households buy now instead of 15 years ago when it comes to calculating the overall change in price levels.
On Thursday, the Ministry of Statistics and Programme Implementation (MoSPI) released the new CPI series, which showed retail inflation stood at 2.75% in January. But has it risen or fallen compared to the previous month or the same month of 2025? This is one of the key themes data watchers are discussing.
Apples and oranges
As per the old CPI series, headline retail inflation stood at 1.33% in December. So, in comparison, inflation more than doubled in January. But this is invalid for several reasons. Firstly, new goods and services, hitherto not a part of the CPI have now been included, even as others have been excluded. And how the prices of these items change affect the overall inflation rate.
Consider this: December CPI inflation as per the old series was based on prices of CDs, DVDs, audio and video cassettes being 0.29% lower from, the year-ago period. These items were not part of the basket of goods and services used to calculate inflation for January under the new series. Instead, it contained items like headphones, earphones, ear pods, airpods, and bluetooth devices, whose prices were down 0.99%. So, comparing the two would be like comparing two different fruit baskets: you might like one more than the other, but that’s about as far as you can go.
Back-series question
In such situations, statisticians and economists like to have what is called a ‘back-series’: old data presented in the context of the new. Although MoSPI has provided a ‘back-series’ of the headline index numbers of the CPI going back to 2013, it is only a mechanical exercise. For instance, using the back-series provided and the so-called ‘linking factor’ used to connect the old and new series, it can be found that CPI inflation in December 2025 was 1.17% in the new series versus 1.33% in the old. Over 2025, the average inflation rate is little changed at 2.2% under both the series.
“…the fact that headline inflation is largely same in the new and old series despite a much lower weight of food in new series is a sign that core inflation is softer in newly rebased CPI,” economists from ICICI Securities Primary Dealership said in a report. Making such a comparison is a rather simplistic way to understand what inflation may have been like in 2025 as per the new series because the old CPI basket has not undergone any change or been reconstructed to mirror the new one: one must compare apples and apples to see which is smaller or larger. Given the numerous changes in the new CPI in terms of data sources, items, markets from where prices are to be collected, methodologies, “construction of a detailed back series may need more deliberations and time too”, the Expert Group Report on Comprehensive Updation of CPI noted last month. Their immediate priority was to release the new series.
Gold and silver
It is well known that food items have become less prominent in the new CPI. Another key weight change is that of gold and silver. In the old CPI basket, gold had a weight of 1.08% and silver 0.11%. Now, gold/ diamond/ platinum jewellery together account for 0.62% of the new CPI, while silver jewellery makes up 0.31%.
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If not for the eye-watering rise in global gold and silver prices, India’s inflation would have been even lower in 2025 — according to The Indian Express’ calculations, CPI inflation in December 2025 would have been 0.26% and not 1.33% if gold (69% inflation) and silver (97% inflation) are excluded.
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