Overview

• Nodal ministry for official statistics and monitoring of Central Sector Schemes in India
• Ensures timely, reliable, and credible data for evidence-based policymaking
• Plays a critical role in national accounts, price statistics, surveys, and programme evaluation

Core Functions

• Statistical Policy & Coordination
  
  • Formulation of statistical standards and methodologies
  • Coordination with States/UTs for uniform statistical practices
• National Accounts
  
  • Compilation of GDP, GVA, savings, capital formation
  • Periodic base year revision of national accounts
• Price Statistics
  
  • Compilation of Consumer Price Index (CPI) (Rural, Urban, Combined)
  • Wholesale Price Index (WPI) support functions (currently under DPIIT, but historical linkage exists)
• Large-scale Surveys
  
  • Conducts Household Consumption Expenditure Survey (HCES)
  • Periodic Labour Force Survey (PLFS)
  • Economic Census (now transitioned to administrative datasets)
• Monitoring & Evaluation
  
  • Monitoring implementation of Central Sector Projects
  • Outcome-based performance evaluation
  • Appraisal through Programme Evaluation Organisation (PEO)

Key Organisations under MoSPI

• National Statistical Office (NSO)
  
  • Formed by merging CSO and NSSO
  • Responsible for surveys, national accounts, price statistics
• Computer Centre
  
  • Data processing, IT infrastructure, dissemination platforms

Important Statistical Outputs

• GDP and sectoral growth data
• CPI Inflation (used by RBI for inflation targeting)
• Employment and unemployment estimates
• Household consumption and poverty-related datasets

Recent Reforms & Initiatives

• Data Modernisation
  • Shift from traditional surveys to administrative and big data sources
• Base Year Updates
  • CPI base year updated to 2024
  • National Accounts base year revisions to improve accuracy
• Transparency Measures
  • Advance release calendars
  • Improved metadata and public dissemination

Significance for Governance

• Backbone of economic policymaking, monetary policy, and fiscal planning
• Enables:
  • Evidence-based welfare targeting
  • Accurate inflation and growth assessment
  • International comparability of Indian data

Challenges

• Balancing timeliness with data accuracy
• Capturing informal sector dynamics
• Addressing perception gaps between official statistics and lived experience

Consumer Price Index (CPI): 

What is CPI

• Consumer Price Index measures changes in the average prices of a fixed basket of goods and services consumed by households
• It reflects retail inflation, i.e. inflation experienced directly by consumers
• CPI is the primary inflation indicator used for monetary policy in India

Why Base Year Matters

• CPI is calculated with reference to a base year, which represents consumption patterns and prices of a chosen reference period
• Over time, consumption behaviour changes due to:
  • Income growth
  • Urbanisation
  • Technology adoption
  • Subsidies and welfare schemes
• If the base year is outdated, CPI may misrepresent actual inflation experienced by households

Issues with the 2012 Base Year

• Consumption weights were based on 2011–12 Household Consumption Expenditure Survey
• Since then:
  • Share of food in household spending has declined
  • Spending on services, health, transport, education and communication has increased
  • Subsidised food and energy altered effective household expenditure
• Resulted in lower measured inflation, even when households felt prices rising

Perception vs Official Inflation

• Official CPI inflation (Dec 2025): 1.33%
• Household inflation perception (RBI Inflation Expectations Survey):
  • Current: ~6.6%
  • Expected in one year: ~8%
• This divergence highlighted:
  • Under-weighting of frequently used items
  • Poor capture of service-sector inflation
  • Weak representation of regional and income-group variation

New CPI Series (Base Year 2024)

• Base year updated from 2012 to 2024
• New weights derived from Household Consumption Expenditure Survey 2023–24
• Expected improvements:
  • Better reflection of current consumption patterns
  • Higher weight to services and non-food items
  • Improved credibility of inflation data
• First inflation data under new series released from January 2026

Implications for Policy

• More accurate CPI improves:
  • Interest rate decisions by RBI
  • Real wage and pension indexation
  • Fiscal planning and welfare adjustments
• Reduces disconnect between:
  • Statistical inflation
  • Lived inflation experience of households

Structural Limitation of CPI

• National CPI aggregates prices across:
  • Diverse regions
  • Rural and urban areas
  • Income groups
• Even with updated base year:
  • A single number cannot fully capture heterogeneous inflation experiences
  • Supplementary indicators remain important

Overall Significance

• Base year revision is essential for statistical integrity
• Updated CPI strengthens:
  • Inflation targeting framework
  • Public trust in economic data
  • Policy responsiveness to ground realities

A regularly updated CPI is critical for aligning macroeconomic policy with everyday economic experience.