What Happened
- India's retail inflation, as measured by the Consumer Price Index (CPI), rose to 3.21% (year-on-year) in February 2026, up from 2.74% in January 2026, according to data released by the National Statistical Office (NSO), MoSPI.
- This is the second monthly release under the new CPI series with base year 2024=100, which replaced the earlier 2012=100 series effective February 12, 2026.
- Food inflation for February stood at 3.47%, while rural CPI (3.37%) remained above urban CPI (3.02%).
- Housing inflation came in at 2.12%, reflecting its increased weight in the revised basket.
- Analysts noted that the full impact of the West Asia conflict on domestic prices had not yet been captured in the February data.
Static Topic Bridges
The New CPI Series 2024=100: A Comprehensive Revision
MoSPI undertook a comprehensive base year revision of the CPI from 2012=100 to 2024=100 — the most significant methodology overhaul in over a decade. This kind of periodic revision is essential to reflect structural changes in consumer spending patterns.
- Nodal Authority: Ministry of Statistics and Programme Implementation (MoSPI) through the National Statistical Office (NSO).
- Weight basis: Household Consumption Expenditure Survey (HCES) 2023–24 — the first such survey after a gap of 11 years (previous HCES was 2011–12).
- Base price collection: January–December 2024 (ensuring alignment between weight reference period and price reference period).
- Item basket: Expanded from 299 to 358 items; new additions include OTT subscriptions, e-commerce pricing, delivery charges.
- Data collection: Real-time price data from 1,407 urban markets and 1,465 villages across all States and UTs, collected by Field Operations Division (FOD), NSO.
- Classification: Adopts COICOP 2018 (Classification of Individual Consumption According to Purpose) — a UN Statistics Division framework with 12 divisions, 43 groups, 92 classes.
- Key weight changes: Food and Beverages weight reduced from 45.86% to 36.75% (reflecting increased household spending on services, housing, healthcare); Housing weight increased from 10.07% to 17.66%.
Connection to this news: The February 2026 CPI of 3.21% is computed under this new series. The reduced food weight means headline inflation appears lower than it would have under the old series even with the same absolute food price rise.
Why Base Year Revisions Matter for UPSC
Index numbers — including the CPI, WPI, and IIP — must undergo periodic base year updates to remain representative of current economic realities. A stale base year creates systematic distortions.
- Base year revision in CPI does not change the actual prices consumers pay — it changes how the index weights different categories of spending.
- The old CPI (2012=100) overweighted food (45.86%) relative to the consumption patterns of 2023–24 households, where food's share had fallen to 36.75%.
- Comparable series: WPI uses 2011-12=100; IIP (Index of Industrial Production) also uses 2011-12=100 (both due for revision).
- The GDP deflator and National Accounts Statistics use base year 2011-12=100 (also under revision).
Connection to this news: Comparing February 2026 CPI (3.21% under new series) with earlier months requires caution — the headline number is not directly comparable to pre-February 2026 data under the old series without a linking factor.
CPI vs WPI: Complementary Inflation Measures
India tracks inflation through two main indices: CPI (retail-level) and WPI (wholesale-level). They serve different purposes and are compiled by different agencies.
- CPI: Compiled by MoSPI/NSO; measures retail prices paid by final consumers; used as the RBI's inflation anchor for monetary policy under the FIT framework.
- WPI (Wholesale Price Index): Compiled by the Office of the Economic Adviser (OEA), Ministry of Commerce and Industry; measures prices at the factory/wholesale level; base year 2011-12=100; 697 commodities.
- CPI typically leads WPI in transmitting demand-side pressures; WPI leads CPI for cost-push (input price) shocks.
- India abolished the GDP deflator-based inflation targeting and moved to CPI-based targeting via the RBI Amendment Act, 2016.
Connection to this news: The rise in CPI inflation to 3.21% in February signals demand-side and supply-side pressures building at the consumer level — a key input for RBI's MPC deliberations on monetary policy.
Key Facts & Data
- CPI February 2026: 3.21% (January 2026: 2.74%)
- Food inflation February 2026: 3.47%
- Housing inflation February 2026: 2.12%
- Rural CPI: 3.37%; Urban CPI: 3.02%
- New CPI series base year: 2024=100 (launched February 12, 2026)
- Previous CPI base year: 2012=100
- Food & Beverages weight: reduced from 45.86% to 36.75%
- Housing weight: increased from 10.07% to 17.66%
- CPI item basket: expanded from 299 to 358 items
- HCES basis: Household Consumption Expenditure Survey 2023–24
- COICOP 2018: 12 divisions, 43 groups, 92 classes, 162 subclasses, 358 items
- Data collection: 1,407 urban markets + 1,465 villages
- Compiling authority: NSO, MoSPI