New CPI Series Reflects Evolving Spending, May Stabilize Inflation: CEA

• Chief Economic Adviser Anantha Nageswaran stated India's new CPI series better captures current household spending patterns, leading to more accurate inflation readings.
• The revised series reflects evolving consumption, with rising incomes shifting spending towards services, which now account for a growing share of economic activity.
• Updating index weights to mirror current consumption trends is expected to make headline inflation less volatile, especially as services inflation is steadier than food and fuel prices.
• A more stable inflation print could allow monetary policy to focus on aggregate demand and core inflation, rather than temporary price shocks.
• The updated series also improves housing cost measurement, addressing urban bias and enhancing accuracy across regions, reinforcing India's statistical credibility.