The government will track expenditure by households on e-commerce, OTT platforms and rail fares, among others to calculate retail inflation in the Consumer Price Index (CPI) 2024 series rolled out today. The data sets will be collected through computer assisted interviewing. 

"As part of the base updating exercise, the CPI 2024 series marks the introduction of Computer Assisted Personal Interviewing (CAPI) for price data collection. Under CAPI, price data are collected electronically using handheld devices with in-built validation checks, standardised item specifications, and real-time monitoring capabilities," said a release from the ministry of statistics and programme implementation. 

"The transition to CAPI enhances data quality, timeliness and consistency. Physical market price collection continues to form the backbone of CPI compilation," it said. 

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New inflation data to tap alternative data source

"However, to reflect changing purchasing behaviour, the CPI 2024 series supplement traditional collection with alternative data sources," the release said. These include e-commerce prices introduced as an additional market in 12 large towns (population exceeding 25 lakhs), and online sources for select services such as airfares and OTT subscriptions. 

"Administrative data for standardised services such as rail fares, postal charges and fuel prices. Clear item specifications and defined price collection protocols are followed to ensure comparability and consistency," the release said. 

Housing index compilation widened

"In the revised CPI series, the Housing index is compiled using a weighted average of three constituent groups, namely “actual rental payments for housing”, “maintenance, repair and security of the dwelling”, and “water supply and other miscellaneous services” relating to the dwelling," the release added. 

"Housing inflation is thereafter computed on a year-on-year basis based on the resulting composite housing index," it said. It may be noted that under the new series with 2024 as the base year, retail inflation stood at 2.75% in January, according to the Mospi release. 

Meanwhile, Chief Economic Advisor V. Anantha Nageswaran on Thursday said the CPI series will enhance the quality and reliability of data used for monetary and fiscal policymaking. He noted that the new series broadens coverage by incorporating a larger number of goods and services currently consumed, while removing items that are no longer relevant. The weights assigned to various item groups have also been recalibrated based on findings from the Household Consumption Expenditure Survey (HCES) 2023–24 to better reflect prevailing consumption patterns.

"Since the CPI basket is now aligned with recent expenditure data, the inflation signals derived from this will be more closely matched with the economic conditions. This improves the information basis for calibrating monetary and fiscal policy," Nageswaran said on the new CPI series.