Food items may shed weight in CPI basket
Consumer Price Index (CPI) decline by up to 6.5 percentage points in rural areas and 3.4 percentage points in urban areas, going by the Household Consumption Expenditure Survey (HCES) 2022-23, experts said.
A government panel is looking into changes to the CPI basket and base year revision of the inflation series. The CPI was last revised in 2011-12 as the HCES held in 2017-18 was junked due to inaccuracies.
Move may Lower Retail Inflation
The panel is likely to suggest revising it downwards in line with the reduced spending on food items as per the Household Consumption Expenditure Survey, concurred officials who did not want to be named.
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Currently, the weightage of food and beverages is 45.9% in CPI. It is 36.3% in urban areas and 54.2% in rural areas. This is likely to drop significantly in line with the changes in the consumption pattern thrown up in the survey. The lower weight for food items could lower retail inflation and reduce its volatility, as food products have been leading to sharp swings in inflation data.
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