Consumer price inflation (CPI) with changed base year from 2010 to 2012 inched up in January but remained well within the central bank’s comfort levels. CPI rose to 5.1% in January, higher than the previous month's 4.3%. Retail inflation was 5% under the old series, while RBI had expected CPI to be at 8% in January 2015 and 6% in January 2016.
The Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation with the new year has revised the Base Year of the Consumer Price Index (CPI) from 2010=100 to 2012=100. In this revised series, many methodological changes have been incorporated, in order to make the indices more robust. As per the new series, higher weight has been assigned to education and health services, while the weight of food and fuel items was reworked and house rent index data has been widened.
The CPI (Rural, Urban, Combined) were released on Base 2012=100 along with Consumer Food Price Index (CFPI) for all India Rural, Urban and Combined for the month of January 2015 and the subsequent monthly release of CPI and CFPI will be on the revised Base Year only. CPI inflation rates (Provisional) on point to point basis i.e. January, 2015 over January 2014 stood at 5.25 (Rural), 4.96 (Urban) and 5.11 (Combined). On the other hand CFPI provisional was 5.69 (Rural), 6.96 (Urban) and 6.06 (Combined).
Though, the inflation rates remaining in RBI’s comfort zone has raised the voices of rate cuts again, but the central bank too will be affecting a base year change in its estimation. The RBI in its February monetary policy review had already said it will need to review the revised inflation and other growth data before cutting rates.
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