What is the new base year of the Consumer Price Index (CPI)?

Question

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Correct — D, 2024. The National Statistical Office, under the Ministry of Statistics and Programme Implementation (MoSPI), shifted the Consumer Price Index to a new base of 2024 = 100, replacing the 2012 = 100 series. The revised series was launched with the January 2026 CPI release in February 2026. Its weights are drawn from the Household Consumption Expenditure Survey (HCES) 2023-24 using the Modified Mixed Reference Period, and the basket is reclassified on COICOP 2018. Because households now spend a smaller share of their budget on food, the weight of 'food and beverages' falls from about 45.9 per cent in the old series to about 36.8 per cent in the new one, while the item basket widens from 299 to 358 items.

Why the other options are wrong — (a) Not a CPI base year. The number is familiar because '2011-12' is the base of the GDP series and the reference year of the consumer expenditure survey that supplied the weights for the outgoing CPI — but the index base itself was 2012, not 2011.  (b) This is the OLD base year (2012 = 100) that has just been replaced. It is the most tempting option because it was the correct answer for over a decade — the question is precisely about the change away from it.  (c) Confuses the survey with the index. The Household Consumption Expenditure Survey used for the new weights ran in 2023-24, but the base year of the index itself is 2024.

Concept: A price index measures today's prices against a reference year whose level is set at 100 — that reference year is the base year. The base has to be revised periodically because both the basket of goods and services people buy and the share of spending on each item drift over time; an index anchored to a stale basket steadily misstates the cost of living. India revises the CPI base using fresh household consumption survey data, which is why the 2024 = 100 series takes its weights from HCES 2023-24. The CPI (Combined) is the number that matters for policy: the RBI's flexible inflation-targeting framework is defined on it, with a 4 per cent target and a tolerance band of plus or minus 2 percentage points.

State PCS 2026 Q49 — Economy PYQ with Answer

State PCS 2026 Q49 — Economy PYQ with Answer