Urban-Rural Inflation Gap Narrows Significantly Under New CPI Series

• India's urban-rural inflation gap has narrowed significantly with the new consumer price index (CPI) series.
• Latest data shows rural inflation at 2.73% and urban inflation at 2.77%, a difference of only 0.04 percentage points.
• This is a sharp contrast to the older CPI series, where the gap was much wider, for example, 1.27 percentage points in December 2025.
• The narrowing is mainly due to changes in the weight of food items in the CPI basket; rural food weight declined from 51% to 42%.
• Categories like housing, transport, health, and personal services have gained prominence, reflecting evolving consumption patterns.