Govt could consider including core inflation number in CPI releases: Statistics Ministry receives suggestions

The government could deliberate upon expanding the options for inflation estimates in the CPI release, according to sources. Likely deliberations could revolve around having a core inflation number in future CPI releases.

Currently, the CPI print carries the headline and food inflation rates. If the core inflation number is included upfront, this will add to the overall price analysis and commentary by the government. Some suggestions have also come in for having a CPI estimate without food inflation. If agreed upon by the government, this may form a fourth option for inflation internals.

#Government could mull including core inflation number in CPI releases: Sources to @Sapna_CNBC

Alert: MoSPI has received suggestions to compile core inflation

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— CNBC-TV18 (@CNBCTV18Live) September 26, 2024

It is noteworthy that in an open house conducted this week by the Ministry of Statistics, forecasters and economists have suggested the government to compile core inflation for a uniform understanding of the same. The open house was also attended by senior finance ministry officials, the Chief Economic Advisor and the Economic Affairs Secretary. Sources indicate going forward this suggestion may find traction within the government, resulting in a more broad-based CPI release.

Sources indicate giving a timeline to any of this would be premature, as the government would first need to deliberate on the same.

The Minsitry of Statistics has also received suggestions on reducing the lag between GDP releases and changing the time for the release so that data can be analysed the same day.

The government releases GDP prints at 5.30 in the evening. In the meanwhile, the government is already working on changing the base years for GDP and CPI. 2022-23 is being proposed as the new base year for GDP, IIP and WPI calculations and 2024 as the new base year for calculating CPI, along with a reconfiguration of the basket of items.

In August, India’s retail inflation slightly increased to 3.65%, against July’s 3.6% and 6.83% in the same month last year.

Earlier, CNBC-TV18 reported that the government plans to revise the base year for the Gross Domestic Product and Consumer Price Index within the next six to eight months. The move is expected to provide a more accurate reflection of economic conditions.