How India counts inflation, and why your grocery bill disagrees
The CPI basket was weighted from a 2011-12 consumption survey. Your household in 2026 spends nothing like that. An anatomy of the gap.
Dev Patel
9 min read
If official inflation says 4% and your household budget screams 9%, you are not imagining things — you are living in a different basket. The consumer price index measures the price of a fixed bundle of goods, and India’s bundle was fixed a long time ago.
The basket vs your basket
CPI weight vs estimated urban household share, %, selected categories
The CPI gives food nearly 46% of the index. Urban household surveys suggest the real share has fallen toward a third, while housing, transport and services have grown. When food is cheap and rent is dear, the index flatters your reality; when onions spike, it exaggerates it.
The fix is underway
A rebased CPI built on the new consumption survey is in the works. Until it lands, the practical advice is simple: read the sub-indices, not the headline. The index for “miscellaneous services” is closer to an urban professional’s life than the aggregate will ever be.
Written by
Dev Patel
Dev is our data editor. He writes explainers on statistics, survey design and the fine print behind India’s official numbers.
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