The Index of Core Industries (ICI) has finally joined the country’s other economic metrics in becoming up-to-date and representative of the economy. The other metrics such as the national accounts, Consumer Price Index (CPI), Wholesale Price Index (WPI), and the Index of Industrial Production (IIP) were updated earlier this year, although even those were after considerable delays. The ICI has now joined their ranks with the June data being based on a new series with an updated base year, an additional sector being covered, and revised weights and methodologies. This is a welcome upgrade. The performance of these core industries is a vital barometer of the state of the economy. In the new series, the previous eight sectors have become nine, with the vital inclusion of the iron ore sector. Improvements have also been made to how the steel and coal sectors are measured in order to remove the previous double-counting that was taking place. The addition of a sector would naturally change the distribution of weights of the sectors in the index, but the final weights also reflect a broader shift in economic activity. The coal and natural gas sectors have seen their weights nearly halve to about 5.6% and 3.8%, respectively. On the other hand, the electricity sector now makes up more than 30% of the index from less than 20% in the previous series. All of this perhaps reflects the rising share of renewables in electricity generation, even as demand for electricity itself surges.

The performance of the index in June 2026, with a five-month-high growth of 5%, would suggest that Indian industry is shrugging off the slump induced by the West Asia crisis. However, two of the strong growth numbers — iron ore by 43.9% and electricity by 9.8% — were due to a statistical base effect since both sectors had contracted in June last year. It remains to be seen whether the numbers will remain this positive once that base effect wears off in the months ahead. The new series highlights some of the systemic issues that the old series did, such as the persistent contraction of the crude oil and natural gas sectors. They have contracted continuously for 18 and 24 months, respectively. If India does not have these resources, that is one thing. But if it has them and still is not able to extract them economically, then that is a serious shortcoming. The update of the ICI and the recent upgrade of the WPI would have been a good time for a broader statistical reorganisation. With the Ministry of Statistics and Programme Implementation handling the CPI and the IIP, it only makes sense for the WPI and ICI to move to it from their current home in the Ministry of Commerce and Industry. That change can still be made.

The government has, in recent months, implemented several long-overdue but welcome upgrades to India’s statistical databases. Wide-ranging, they cover the way the country measures Gross Domestic Product (GDP), industrial production, and price changes at the retail, wholesale, and producer levels. These updates have not only made India’s key economic statistics more representative of reality, but have also brought them in line with international best practices. The most basic change across all indices has been the updating of base years. Until recently, the base years for GDP, the Consumer Price Index (CPI), Wholesale Price Index (WPI), and Index of Industrial Production (IIP) were either 2011 or 2012. As such, these measures were significantly outdated and less reflective of reality with each passing year. In February, the Ministry of Statistics and Programme Implementation (MoSPI) released the new series of national accounts data, including GDP, with a base year of 2022-23. The new series incorporates methodological improvements and new data sources, making it more granular and robust. Some of these, such as the double-deflator approach, have long been demanded by statisticians and international bodies, including the IMF.

Similarly, MoSPI had in February also released the new series of the CPI with an updated base year of 2024, a more inclusive basket of items measured, and more accurate weightages. This has enabled a more realistic reading of retail inflation, a key metric in interest-rate decisions. In early June, MoSPI then released the new series of the IIP as well. The base year was updated to 2022-23 and the index’s data collection was strengthened. This, too, eventually feeds into more accurate GDP data. The other factor to be highlighted is that the data upgrades have not been limited to just MoSPI. The Ministry of Commerce and Industry also updated its WPI, releasing the new series on Monday. A more accurate WPI and CPI yield a more accurate GDP deflator, which strengthens the way that statisticians derive real GDP growth after having adjusted for inflation. The Commerce Ministry also released a new Producer Price Index (PPI), which is to replace the WPI in five years. A PPI is the standard among developed economies and provides more information about both goods and service price levels at the producer stage. With all these, the IMF is sure to improve the recurring ‘C’ grade it has given India’s national accounts data. These, it is hoped, will also be capped off by a time-bound release of the new Census with no further delays.

The retail inflation figure for December 2025 is the final instalment of the current series of the Consumer Price Index (CPI), with a base year of 2012, before it is updated to a new base year and with new weightages. The CPI data this year have been particularly useful in highlighting the problems with relying on a dataset that has not been updated in more than a decade. The inflation figure for December 2025 stood at 1.33%. The fact that it was a three-month high is merely a statistical curiosity since it was also the third lowest since the current series began. Overall, in the April-December 2025 period, inflation has averaged 1.7%, substantially lower than the 4.9% average in the same period of 2024. But it does not feel that way. Anecdotal evidence and hard data show that the inflation that people are really experiencing is far higher than what the official data show. For example, the government’s own first advance estimates for GDP growth this year show that it expects private consumption to grow slower than it did last year. If inflation had indeed eased to the degree that the official data suggest, surely consumption should have picked up. According to its latest edition of the Reserve Bank of India’s inflation expectations survey from December, households perceived inflation to be 6.6% — a far cry from the official 1.33% — and felt that it would accelerate to 7.6% in three months and to 8% in a year. The feeling clearly is that not only are prices rising, but they are rising at a faster rate. Failing to capture this is where the official data let policymakers down.

The most basic issue with any inflation data is that a single figure is expected to capture the variety of price changes that take place across the country. The national inflation number aggregates price levels and movements from districts in Kashmir to villages in Kerala and everywhere in between, for both urban and rural. Naturally it will lose nuances in the process. Further, while this is the natural peril of computing national statistics for a diverse country such as India, the outdated nature of the CPI makes matters significantly worse. The weightages of the various sub-sectors in the index were based on consumption patterns in 2012. People consume very differently now, especially because of various central and State subsidies being offered. Thankfully, on February 12, the government will release the January inflation data based on the new series of the CPI. This series will see the base year updated to 2024, and will incorporate new weights based on the Household Consumption Expenditure Survey 2023-24. It is an update sorely needed.

“There is no systemic bias in the central bank’s inflation forecast,” said Poonam Gupta, Deputy Governor of RBI, adding that reducing forecasting error is important.

“While minimising the forecast errors is equally important, there is no systematic bias in the forecast. It is not that the RBI’s forecast is biased in any particular way. As far as the growth is concerned, again we use a variety of approaches and models,” she said while speaking at an event conducted by the Ministry of Statistics and Programme Implementation (MoSPI) to explain the changes in the new CPI base revision on November 26 at Mumbai.

The Deputy Governor’s comments come in the backdrop of economists criticising the RBI for having an overstated CPI forecast and hence a hawkish “bias” in monetary policy, and that a rate cut was warranted. Prices increased at a rate of 0.25% in October 2025, making it the slowest pace ever.

Ms. Gupta also spoke about initiatives brought in by the RBI to disseminate data. She said that the balance of payments (BoP) data is soon expected to be released on a monthly basis.

The Ministry of Statistics and Programme Implementation conducted the workshop to consult key stakeholders, including chief economists of banks, regarding the revision of the base year for the consumer price index, which measures retail price levels.

Currently, the base year for the index is set at 2011-12, and the base year will be revised to 2024-25. The proposed revised CPI series will be calculated using a sample which includes a 25% increase in the number of markets, 40% increase in towns and 17% increase in number of items compared with the previous series, according to MoSPI.

Additionally, the data will be more granular, globally compliant, and will utilise a refined methodology, incorporating new sources of data, the Ministry stated.

The retail inflation data for October once again underscore the fact that the update of the Consumer Price Index (CPI) cannot happen fast enough. The data show that the rate of overall inflation fell to just 0.25%, the lowest it has been since at least January 2012. On the face of it, this would be cause for celebration, but a deeper look reveals this drastic fall to be a statistical anomaly rather than an actual fall in price levels. The food and beverages category saw prices falling 3.7% in October, the largest in the history of the CPI’s current series. However, the main reason for this contraction was not so much that food prices have fallen, but because food inflation in October last year was a blistering 9.7%. This high base ensured that food inflation in October 2025 was negative, even though vegetable prices in markets have been on the rise recently. With the food and beverages category enjoying a weightage of nearly 46% in the overall CPI basket, this statistical anomaly in food inflation was responsible for pulling the entire index down. Indeed, inflation in nearly every other major sub-group — fuel and light, housing, tobacco, and the miscellaneous category — was higher this October than last. The impact of the GST rate cuts has, so far, been seen only in the clothing and footwear category — the only one apart from food to see inflation lower than last year. All of this shows just how skewed the inflation measure is. Not only is it outdated, with the base year set as 2012, but the weightages are no longer accurate and more often obscure rather than clarify. The disconnect between the CPI and reality can perhaps best be shown by the fact that people the Reserve Bank of India (RBI) had surveyed in September had said that their perceived inflation rate was 7.4% — a far cry from what the CPI reported.

The urgency behind the update is not just because of the vast gap between measured and perceived inflation. It is also because the RBI’s Monetary Policy Committee uses the CPI as its benchmark when deciding what to do with interest rates. Its next meeting is in December and it will have to decide whether to keep rates unchanged or to cut them. It will have to contend with growth data clouded by the temporary impact of the GST rate cut-related demand boost. Having to also parse through inflation data beset by statistical anomalies will only make accurate policymaking that much harder. The Ministry of Statistics and Programme Implementation has said that the new series of the CPI will be ready by the first quarter of the next financial year. The sooner it happens, the better.

Retail inflation in August rose slightly to 2.07% from 1.61% in the preceding month, mainly due to an increase in prices of vegetables, meat and fish, according to a government data released on Friday (September 12, 2025).

The inflation based on the consumer price index (CPI) was 3.65% in August 2024.

The annual inflation during August 2025 over August 2024 was at (-) 0.69%, according to the data released by the National Statistics Office (NSO).

“An increase in headline inflation and food inflation during the month of August, 2025 is mainly attributed to increase in inflation of vegetables, meat and fish, oil and fats, personal care and affects, egg,” NSO said.

The Reserve Bank has been mandated by the government to ensure inflation remains at 4% with a margin of 2% on either side.

Retail inflation in India slipped to 1.55% in July 2025, the lowest since June 2017, and below the Reserve Bank of India’s comfort band of 2-6%, primarily led by a contraction in food prices.

The Consumer Price Index (CPI), released by the Ministry of Statistics and Programme Implementation on Tuesday (August 12, 2025), showed inflation in India has been easing for nine consecutive months.

The rate of inflation in the food and beverages category came in at -0.8% in July 2025, lower than -0.2% in June and 5.1% in July 2024. 

“In the food basket, there was deflation in key items such as vegetables, pulses, spices, and meat,” Rajani Sinha, Chief Economist at CareEdge Ratings said. “Looking ahead, food inflation is likely to remain contained, supported by healthy agricultural activity and a favourable base.” 

Vegetable and pulses prices contracted 21% and 14% respectively, driven by a high base and falling prices.

Ms. Sinha added that a good progress of the monsoon, adequate reservoir levels, and strong kharif sowing bode well for agricultural output and food price stability. 

Core inflation, which excludes the impact of food and fuel prices, also eased to 4.1% in July 2025 from 4.4% in the previous month, nearly at the RBI’s target of 4%. 

The other broad categories in the CPI saw inflation remaining nearly the same in July as in June. The pan, tobacco and intoxicants category saw inflation remain flat at 2.4% in July. Similarly, the clothing and footwear category saw inflation ease marginally to 2.5% in July from 2.5% in June.

Inflation in the housing segment remained at 3.2% in July, while that in the fuel and light category quickened to 2.7% in July from 2.5% in June. 

Dipanwita Mazumdar, Economist at the Bank of Baroda, said that a statistical high base will keep the inflation rate down in September-December 2025. 

“The current cycle is acting in favour of us when the inflationary impact from tariffs is the centre point of global discussions,” she said in a note. “We expect the downside risk to global growth will largely keep international commodity prices in check. This is expected to partly negate the higher tariff rates in place.” 

However, she also added that India needs to be watchful in case it has to completely stop buying Russian oil in accordance with U.S. President Donald Trump’s demands. 

“In this case, some diversification towards Kuwait and Iraq would also lend support,” she said.