A fresh Consumer Price Index series is set to capture India’s changing spending habits more accurately, with projections holding retail inflation under 4%, reveals Bank of Baroda’s latest analysis. Unveiled Friday, the report highlights how this upgrade will refine policy-making to global benchmarks.
Core inflation remains the focal point, wary of spikes in precious metals. The recalibrated weights across categories should anchor inflation within the targeted 4% ±2% range. Enhanced handling of food seasonality strengthens the index’s reliability for interest rate decisions.
The basket now boasts 358 items, up from 299, drawing from extensive rural and urban markets plus online sources. Food’s share drops to 40.1% from 45.8%, integrating contemporary items like streaming media, premium dairy, and digital storage devices while ditching relics like DVD players.
Shifts in food inflation patterns emerge: a mild rise in the new series versus consistent declines previously, linked to lighter emphasis on erratic veggies. Bank of Baroda’s ECI notes easing essential prices, down 0.4% annually in early February 2026, barring minor exceptions in oils and lentils.
Supply chain interventions by the government will further tame food costs. This evolved CPI promises a clearer, more relevant inflation narrative, empowering the RBI with data-driven insights for economic stability.