CPI measures changes in prices of goods and services that households acquire for the purpose of consumption.

Facts you need to know ( Please learn thoroughly these for 2026 CSE Prelims)

• It is used as a tool by governments and central banks for inflation targeting and for monitoring price stability.
• It is used for indexing dearness allowance to employees for increase in prices.
• The CPI  is released by National Statistical Office under the Ministry of Statistics.
• CPI base year is to be changed to 2024 from earlier 2012.
• The composition of the inflation basket has changes: the weight of food and beverages has been reduced from 54% to 37%.
• The United Nations Statistical Division’s (UNSD) Classification of Individual Consumption According to Purpose (COICOP 2018) will be adopted into CPI for better global comparison.
• The CPI basket now includes 358 weighted items, up from 299 earlier.
• New inclusions include rural house rent, OTT services, international air travel, and newer energy sources such as CNG and PNG.
• The number of service items has risen to 50.
• The new CPI uses the Jevons index, a chain-price method that links monthly price changes.

Source: The Hindu