Consumer Price Index
In one line: The Consumer Price Index (CPI) measures changes in the prices of a basket of goods and services bought by households; India's inflation target uses the combined (rural and urban) CPI.
Who compiles it
The National Statistics Office under the Ministry of Statistics and Programme Implementation. In February 2026 it released a new series with base year 2024, replacing the 2012 base. The basket grew from 299 to 358 items, and the weight of food and beverages fell from 45.86% to 36.75%.
Headline and core
Headline inflation covers the whole basket. Core inflation strips out volatile food and fuel. India targets headline CPI, because it reflects what households pay, but core is watched as a guide to demand pressure.
Why it is in the news
The decade review says food, a supply-driven component, limits what interest rates can do.
Where to go next
- Inflation expectations
- Monetary Policy Committee
Consumer Price Index in the news
- Ten years of inflation targeting: does the RBI's framework work in India? 7 September 2026
The price index the 4% target is set on, recently rebased to 2024.
On the reference shelf
Previous-year questions on this
- 2024 · GS3 · 10 marks What are the causes of persistent high food inflation in India? Comment on the effectiveness of the monetary policy of the RBI to control this type of inflation.
- 2022 · GS2 · 15 marks Besides the welfare schemes, India needs deft management of inflation and unemployment to serve the poor and the underprivileged sections of the society. Discuss.
- 2019 · GS3 · 10 marks Do you agree with the view that steady GDP growth and low inflation have left the Indian economy in good shape? Give reasons in support of your arguments.
- 2022 · Prelims In India, which one of the following is responsible for maintaining price stability by controlling inflation? (a) Department of Consumer Affairs (b) Expenditure Management Commission (c) Financial…
- 2017 · Prelims Which of the following statements is/are correct regarding the Monetary Policy Committee (MPC)? 1. It decides the RBI's benchmark interest rates. 2. It is a 12-member body including the Governor of…