Mint Explainer: New basket, same inflation story? The math behind India’s CPI reset

Subscribe to enjoy similar stories. NEW DELHI : India’s inflation basket has witnessed a sharp reset after over a decade, and it proved to be an anticlimax of sorts. Going into the inflation data released on Thursday, the hypothesis was: Our inflation measurement was highly outdated, and the monthly numbers we got—and, by extension, our monetary policy decisions—may not have been grounded in reality for some years.

But as it turns out, at face value, the major overhaul in the base year, consumption patterns, and methodology did not quite alter the country’s inflation story as we have known it in the last few years. Let’s break down the maths of it. The statistics ministry released the inflation data for January 2026, the first with a base year of 2024, reporting retail inflation at 2.75%.

But naturally, this is not comparable with the inflation data for previous months and years, which used the base year 2012. To enable like-to-like comparison, the ministry also released “back-series" data from 2013 to 2024. Inflation figures for different months using the same base year are theoretically comparable.

But are they? The back-series shows that inflation numbers for previous years have barely moved from what we knew them to be so far. In fact, the maximum difference in inflation rates between the old and the new series till 2024 is 16 basis points. For example, in July 2024, retail inflation stood at 3.6% according to the old series.

Under the new series, it is nearly the same: 3.67%. The similarity is not unexpected, though. Technically, it’s not even possible to retrospectively have the same kind of data that the ministry now intends to use during its revised inflation computation.