- Why in news
- On 12 January 2026, MoSPI released CPI data for December 2025. Headline inflation was 1.33% (provisional), and this was the last release on base 2012=100.
- What it is
- The Consumer Price Index (Base 2012=100) tracks changes in retail prices of a fixed basket of goods and services for rural, urban and combined India. MoSPI's National Statistics Office compiles it. Its year-on-year change is the headline retail inflation figure used by the RBI under its inflation-targeting framework.
- Food inflation
- CFPI-based food inflation was -2.71%, the seventh straight month of negative food inflation.
- Who collects data
- Prices are collected by NSO field staff from 1114 urban markets and 1181 villages across all States/UTs.
- CFPI coverage
- CFPI uses ten of the twelve sub-groups in 'Food and Beverages', leaving out non-alcoholic beverages and prepared meals, snacks, sweets.
- Housing index
- The housing index is compiled for the urban sector only; no rural housing CPI exists.
- New base
- The revised CPI series on base 2024=100 is due on 12 February 2026 or the next working day.
Don’t confuse with CPI vs WPI: CPI measures retail prices faced by consumers and is compiled by MoSPI. WPI measures wholesale prices and is compiled by the Office of the Economic Adviser, DPIIT.
Don’t confuse with CPI vs CFPI: CPI (General) covers all groups. CFPI covers only food items, with ten sub-groups.
Economy terms and data: 42 Prelims questions since 2013, rising in recent years; they test what a term or instrument means. In Mains, 12 news-triggered questions.
Why it matters
- CPI is the RBI's target measure for monetary policy, so low inflation affects rate decisions.
- Group-wise and state-wise data show where price pressure falls, such as food, housing or health.
Problems
- Negative food inflation can hurt farmer incomes even as it helps consumers.
- An outdated 2012 base weights may not reflect current consumption patterns, which is why the series is being rebased.
Way forward
- Move to the 2024 base so weights match present spending patterns.
- Support farm prices and market access when food prices stay very low.
Put in your answer
RBI inflation target: The RBI targets 4% CPI inflation with a tolerance band of 2% to 6%.
- 2024Mains GS3 · Q2Causes of persistent food inflation and RBI monetary policy effectiveness
- 2019Mains GS3 · Q2Whether steady GDP growth and low inflation mean good economic shape
- 2022Mains GS2 · Q16Discuss managing inflation and unemployment to serve the poor
- 2022Prelims Q3When RBI would buy government securities, sell dollars, or buy dollars
- 2022Prelims Q5Advantages of inflation-indexed bonds for government and investors
- 2022Prelims Q68Which body is responsible for maintaining price stability by controlling inflation in India?
UPSC’s own questions that come close to this issue, from our Prelims and Mains banks.
No practice question for this one; the card may still help an answer. Why: Routine monthly data; the concept matters but a question on one month's number is unlikely.
Worth revising until Prelims 2027: most news questions come within two years of the event.