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 Not only is it outdated, with the base year set as 2012, but the weightages are no longer accurate and more often obscure rather than clarify.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.

The Ministry of Statistics and Programme Implementation is all set to conduct two key economic surveys — to measure household finances and to gauge the economic situation of India’s farmers — between July 2026 and June 2027, the Ministry announced on Thursday (September 11, 2025).

These are the All-India Debt and Investment Survey (AIDIS) and the Situation Assessment Survey (SAS) of Agricultural Households.

“Both of these nationally representative surveys are scheduled to be conducted from July 2026 to June 2027,” MoSPI said in a press release.

“The AIDIS is one of India’s most significant surveys on household finance,” it added. “The SAS of Agricultural Households, first launched in 2003, is designed to assess the economic conditions of farming communities.”

According to MoSPI, the AIDIS provides “critical” data on household indebtedness and asset ownership across both rural and urban areas. 

“Its findings are instrumental in shaping national accounts, assessing inequality in asset distribution, understanding credit markets, and informing policies of the Reserve Bank of India, MoSPI, and other government institutions,” it said.

The SAS of Agricultural Households, on the other hand, includes data on agricultural household income and expenditure, indebtedness and access to credit, land and livestock ownership, crop and livestock production, farming practices and the use of technology, and access to government schemes and crop insurance.

“The Ministry of Agriculture and Farmers Welfare, NITI Aayog, researchers, and financial institutions utilise the survey findings to shape policies and programmes aimed at agriculture and rural development,” MoSPI noted.

It added that it has uploaded the draft concept notes and schedules of both surveys on its website and has invited policymakers, researchers, farmer groups, financial institutions, and the general public to share their feedback.

The Index of Industrial Production (IIP), the nation’s monthly barometer of goods output, revealed a 10-month low growth rate in June, at 1.5%, largely due to the sharp contraction in mining activity, by –8.7% (10.3% in June 2024), and electricity output, by –2.6% (8.6% in June 2024). The early onset of the southwest monsoon, with its erratic and uneven distribution, led to water logging in large parts of the mining belts in Odisha, Jharkhand and West Bengal, hampering a key economic activity. Ranchi’s regional meteorological office has said that Jharkhand recorded 504.8 mm (against a normal of 307 mm) between June 1 and July 12 — but five districts were categorised as rain deficient. The resultant damage to the power distribution infrastructure and disruptions to supply chains may have contributed to the sluggish growth in industrial output at 3.9% in June, up from 3.5% a year ago. This in turn, is likely to have led to subdued power demand. While mining and power production collectively make up for almost a quarter (22.3%) of the IIP’s weightage, the rest is apportioned for manufacturing activities. The robust growth in capital (3.5%), intermediate (5.5%) and infrastructure (7.2%) goods output, indicates that much of industrial growth continues to hinge on the government’s infrastructure spends.

There has been a general reluctance, both institutionally and in public economic discourse in India, to explicitly correlate disruptions in economic activity with climate-related events, especially in official narratives such as the IIP or GDP data releases. The Ministry of Statistics and Programme Implementation and the Reserve Bank of India (RBI) tend to frame industrial and economic under-performance in terms of ‘high base effects; supply chain bottlenecks; input cost fluctuations; global demand softening; and domestic consumption contraction’. Climate-related disruptions, such as in mining belts, are rarely mentioned in IIP or national accounts commentary. Economic data agencies in India have been slow to integrate climate risk frameworks into routine macroeconomic reporting, unlike institutions such as the European Central Bank or the Bank of England which have begun mapping climate risk to output and financial stability. True, climate attribution is complex: linking a specific event such as waterlogging in a coal mine to broader climate change involves scientific rigour and probabilistic modelling. Policymakers often avoid this due to fear of politicising economic data. Indeed, the RBI’s Financial Stability Reports now include climate-related risks. But this has not yet filtered into production-side metrics such as the IIP. The time has come for India to make a systemic shift to integrate climate attribution to economic activity.