NEW DELHI, Feb 13: Core inflation in India declined sharply to 3.4 per cent under the new Consumer Price Index (CPI) 2024 base series, compared to around 4.15 per cent under the 2012 series, even as headline retail inflation edged up to 2.75 per cent in January 2026, according to the latest report released by the State Bank of India.
The report noted that overall CPI inflation under the new 2024 base stood at 2.75 per cent in January 2026, marginally higher than 2.55 per cent calculated under the old 2012 base using the linking factor.
Rural inflation was recorded at 2.73 per cent, while urban inflation stood slightly higher at 2.77 per cent. Food inflation came in at 2.13 per cent.
The sharp moderation in core CPI to 3.4 per cent under the new series is largely attributed to a reduction in the weight of gold, which has been cut to 0.62 per cent in the 2024 series from 1.02 per cent in the 2012 base.
However, personal care inflation surged to 19.02 per cent in January 2026, driven by steep increases in precious metals. Gold inflation stood at 46.77 per cent, while silver recorded an extraordinary 159.67 per cent rise.
Within food items, inflation pressures were concentrated in select commodities. Tomato prices rose 64.8 per cent, coconut 47.18 per cent and coconut oil 40.4 per cent. In contrast, garlic, onion and potato recorded deflation of 53.05 per cent, 29.27 per cent and 28.98 per cent, respectively.
Among states, Telangana recorded the highest inflation at 4.92 per cent in January 2026, followed by Kerala (3.67 per cent), Tamil Nadu (3.36 per cent), Rajasthan (3.17 per cent) and Karnataka (2.99 per cent).
The report highlighted major methodological revisions in the CPI 2024 base series introduced by the Ministry of Statistics and Programme Implementation.
A key technical change is the adoption of the Jevons short index formula, which compiles the index sequentially rather than calculating price changes directly from the base period, making the inclusion of new items easier.
The weight structure has also undergone significant changes. Under the 2024 classification, the weight of food and beverages now stands at 36.75 per cent. If mapped under the old 2012 classification framework, the share would have been around 42.62 per cent, compared to 45.86 per cent earlier.
Coverage under the CPI has expanded substantially. The 2024 series includes 565 additional markets compared to the 2012 base – 284 new rural markets and 281 new urban markets, taking the total to 1,465 rural and 1,395 urban markets. The number of towns covered has increased from 310 to 434.
The number of weighted items has also risen from 299 to 358, with goods increasing from 259 to 308 and services from 40 to 50 items.
New additions include rural housing, streaming services, value-added dairy products, barley products, pen drives, babysitter services and exercise equipment, while obsolete items such as VCRs, audio cassettes and tape recorders have been removed.
For the first time, 12 online markets across major cities, including Mumbai, Delhi, Bengaluru, Hyderabad, Ahmedabad, Chennai, Kolkata, Surat, Pune, Jaipur, Lucknow and Kanpur have been incorporated to capture weekly price movements on e-commerce platforms.
The report observed that while coverage has widened significantly, the addition of new markets appears skewed, with Uttar Pradesh and Maharashtra accounting for 43 per cent of the newly added markets.
Overall, SBI Research noted that the new CPI 2024 series is more broad-based, reflects evolving consumption patterns, and offers a more comprehensive sub-classification framework, which could help policymakers and researchers undertake better trend analysis and informed policy decisions. (UNI)
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