Economy ยท GS3
Consumer Price Index with base 2024
One line
The National Statistical Office released May 2026 consumer inflation using the CPI series with base 2024 equal to 100.
Summary
The new base updates household spending weights and price samples. CPI drives inflation analysis and monetary policy, but headline numbers can hide differences across food, housing, services, and regions.
PYQ pattern
UPSC often turns this issue into statement-based questions on institutions, mechanisms, and policy limits. Use the official UPSC question-paper archive.
Core notes
- CPI measures changes in retail prices paid by consumers for a representative basket.
- The National Statistical Office compiles the national CPI.
- Rebasing updates weights, item coverage, outlets, and methods using newer consumption patterns.
- Headline inflation is a weighted average and does not equal every household's experience.
Prelims lens
- CPI is different from WPI and the GDP deflator.
- The Reserve Bank of India's inflation target uses CPI inflation.
- A base value of 100 is a reference, not a statement that prices are low.
MCQ 1
Consider the following statements:
- CPI is different from WPI and the GDP deflator.
- Every household experiences exactly the headline CPI inflation rate.
Which of the statements given above is/are correct?
- A. 1 only
- B. 2 only
- C. Both 1 and 2
- D. Neither 1 nor 2
Reveal answerHide answer
A
Statement 1 is correct. Statement 2 is incorrect: every household experiences exactly the headline CPI inflation rate is not a valid conclusion.
MCQ 2
India's national CPI is compiled by:
- A. National Statistical Office
- B. Election Commission of India
- C. National Biodiversity Authority
- D. Directorate General of Civil Aviation
Reveal answerHide answer
A
The NSO under the Ministry of Statistics and Programme Implementation compiles CPI.
Mains
Question, 10 marks, 150 words: How does rebasing CPI improve inflation measurement, and why can headline inflation differ from household experience?
Approach:
- Explain basket weights and price collection.
- Discuss changing consumption patterns.
- Note regional and group differences.
- Suggest transparent back series and granular publication.