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India Revises Consumer Price Index to Reflect Modern Spending

  //health-fitness.news-articles.net/content/2026/ .. umer-price-index-to-reflect-modern-spending.html
  Published in Health and Fitness on Sunday, February 15th 2026 at 17:58 GMT by moneycontrol.com
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New Delhi, February 15th, 2026 - India's National Statistical Office (NSO) today announced a significant revision to the Consumer Price Index (CPI) basket, the key metric used to track inflation within the country. The updated basket, effective immediately, incorporates a range of modern consumer goods and services - from wireless earbuds like AirPods and specialized pet food, to hygiene products like hand sanitizers and wearable technology like smart watches. This marks the most substantial overhaul of the CPI calculation methodology since 2011, aiming to provide a more representative and accurate gauge of price pressures facing Indian households.

The decision to revamp the CPI basket comes as consumer spending habits undergo a rapid transformation, accelerated by the post-pandemic economic recovery and increasing digitalization. The previous basket, formulated over a decade ago, was increasingly seen as failing to adequately capture the evolving preferences and expenditures of Indian consumers.

Beyond the Headlines: What's Changed?

The most notable changes involve both additions and removals from the basket of goods and services tracked for price fluctuations. In addition to AirPods, pet food, hand sanitizers, smart watches, and institutional LPG (used primarily in commercial settings), a range of personal care products have also been included. This reflects a growing emphasis on health, wellness, and technological convenience among Indian consumers.

Conversely, several items considered staples in previous decades have been removed due to a demonstrable decline in their consumption. These include pressure cookers, once ubiquitous in Indian kitchens, margarine - largely superseded by healthier alternatives - and certain seasonal vegetables like beetroot and drumsticks. Some fruit varieties have also been removed, reflecting changing agricultural patterns and consumer demand.

However, the changes aren't merely about adding and subtracting items. A critical component of the revision involves a recalibration of weightages assigned to different categories. The weightage given to 'primary articles' - encompassing food and raw materials - has been reduced from 46.2% to 42.6%. This acknowledges the decreasing proportion of household income allocated to these basic necessities. Simultaneously, the weightage of 'services' has surged from 31.9% to 38.7%. This substantial increase underscores the growing importance of the service sector in the Indian economy and the increasing share of household expenditure devoted to areas like healthcare, education, entertainment, and technology.

Why Now? The Rationale Behind the Revision

Economists have long advocated for periodic revisions to the CPI basket. An outdated basket can lead to inaccurate inflation readings, potentially misguiding monetary policy decisions and distorting economic analysis. The 2011 revision proved inadequate in capturing the significant structural shifts occurring within the Indian economy over the subsequent years.

"The Indian economy is dynamic, and consumer behavior is constantly evolving," explains Dr. Anya Sharma, a leading economist at the Delhi School of Economics. "The pre-pandemic trend of increasing discretionary spending, coupled with the rapid adoption of digital technologies during and after the lockdowns, demanded a re-evaluation of the CPI basket. Failing to account for these shifts would have rendered the CPI a less reliable indicator of the true cost of living."

The NSO acknowledges that the revision process involved extensive household surveys and data analysis to accurately reflect current consumption patterns across different income groups and regions. The updated basket aims to better represent the spending habits of both urban and rural populations, providing a more comprehensive view of inflation across the country.

What Does This Mean for Inflation Figures and the Economy?

The immediate impact on the headline inflation rate is difficult to predict definitively. It will depend on the price movements of the newly included items. AirPods and smart watches, for example, are subject to rapid technological advancements and price fluctuations, while pet food demand is driven by a growing pet-owning population. The NSO has indicated that it will closely monitor price trends in these new categories to refine the CPI calculation methodology further.

However, the long-term implications are expected to be significant. A more accurate CPI is crucial for the Reserve Bank of India (RBI) in formulating its monetary policy. By providing a clearer understanding of underlying price pressures, the revised CPI will enable the RBI to make more informed decisions regarding interest rates and other policy tools. This, in turn, will contribute to greater macroeconomic stability and sustainable economic growth. Analysts predict that the revised CPI might exhibit slightly higher volatility in the short term as the system adjusts to the new composition, but the increased accuracy will ultimately outweigh any temporary fluctuations.