The Consumer Price Index (CPI) is an index, similar to the Nifty 50, that measures the cost of a "basket" of goods and services typically purchased by households.
Each item gets a "weight" based on how much households spend on it.
CPI is calculated using the price data of 358 items which are classified into 6 main groups of varying weights.
These items include:
- Food and Beverages: This includes vegetables, cereals, pulses, and milk, and at 40.104%, it holds the most weightage of the CPI basket. This is because food and beverages are the prime and basic necessity of sustenance.
- Miscellaneous: Holding 33.154% of the weightage, this category includes services like education, healthcare and transport. It also includes personal care products.
- Housing: This has a weightage of 11.881% and it showcases costs of housing, such as rent, maintenance, and utilities.
- Fuel and Light: At 6.383% weightage, this includes expenses related to fuel, electricity, and other forms of energy used for lighting and heating.
- Clothing and Footwear: The 5.489% weightage of this category. It Includes costs of clothing items and footwear purchased by people.
- Pan, Tobacco, and Intoxicants: This section includes products such as tobacco and beverages like alcohol, and therefore, has the lowest weightage of 2.989% in the CPI basket.
RBI uses CPI to decide interest rates. So, when the formula to calculate CPI changes, everything downstream changes too
The old CPI was built on 2012 consumption patterns. The base year has now moved from 2012 to 2024.
National Sample Survey (NSS) field teams collect the market prices for the Ministry of Statistics and Programme Implementation (MoSPI).
CPI 2024 covers 1,465 rural markets and 1,395 urban markets across 434 towns. The basket is bigger too, with more goods and services.
For the first time, prices from e-commerce platforms are being tracked in 12 major cities with populations over 25 lakh. So, if you live in one of these cities, the prices you pay on Amazon or Flipkart now officially count.
Statewise Inflation Rates (%) for January 2026 (based on CPI)