India’s year-on-year retail inflation rate, based on the Consumer Price Index (CPI) with the revised base year 2024, stood at 2.75 per cent in January 2026, compared to January 2025, according to data released by the Ministry of Statistics and Programme Implementation (MoSPI) on Thursday.
The corresponding inflation rates for rural and urban areas were 2.73 per cent and 2.77 per cent, respectively.
Food and Housing Inflation
The year-on-year inflation rate based on the All India Consumer Food Price Index (CFPI) was recorded at 2.13 per cent (provisional) in January. Rural food inflation stood at 1.96 per cent, while urban food inflation was 2.44 per cent.
Food prices saw mixed trends during the month. Prices of vegetables such as potatoes, onions and garlic declined, along with pulses such as arhar and tur. However, tomato prices registered an increase.
Housing inflation for January was estimated at 2.05 per cent (provisional). Rural housing inflation stood at 2.39 per cent, while urban housing inflation was 1.92 per cent. For the first time, the data includes rural house rent to improve coverage of rural housing consumption.
The data also showed a sharp rise in inflation for silver jewellery (159.67 per cent) and gold jewellery (46.77 per cent).
CPI Base Year Revised to 2024
The CPI base year has been revised from 2012 to 2024 using data from the Household Consumption Expenditure Survey (HCES) 2023–24. The new CPI series (Base 2024=100) has been introduced to ensure that the index remains representative of current household consumption patterns, price structures, and the evolving nature of the Indian economy.
MoSPI said the earlier CPI series with base 2012 had served as a stable and reliable measure for over a decade. However, significant structural changes have occurred during this period, including shifts in consumption behaviour, rising income levels, urbanisation, expansion of the services sector, and digitalisation.
Under the revised framework, the classification now follows the Classification of Individual Consumption According to Purpose (COICOP) 2018, introducing 12 divisions in place of the earlier six groups.
MoSPI said the revision enhances coverage and representativeness of the inflation measure, introducing more granular data to support policymakers, financial institutions, businesses and citizens in making data-driven decisions.
Data Modernisation and AI Applications
Earlier, while speaking to ANI, MoSPI Secretary Saurabh Garg had said that revising base years for key economic indicators such as GDP, CPI inflation and the Index of Industrial Production (IIP) would significantly improve the quality and usability of data for artificial intelligence (AI) and machine learning applications.
“It is extremely important to update base years because the structure of the economy changes over time, new data sources become available, and methodologies of data collection also evolve,” Garg had said.
The government had constituted an Expert Group on the base revision of CPI, comprising representatives from the Reserve Bank of India, academia, line ministries and statistical experts.
(With inputs from agencies)
