A new index, the same inflation: how to read India's CPI after the rebasing

The February 2026 inflation number was reported against a reference year most Indian consumers had never seen: 2024 = 100. That is not a footnote. Every consumer price index is a ratio, and changing the base year changes the basket being priced, the weights inside it and, crucially, the month against which the current month is compared.

What the base year controls

The index itself is just a normalised number: an average of prices in a defined basket, scaled so that the base period equals 100. The base year decides which basket, and therefore which spending pattern, counts as typical. A basket built from 2024 consumption weights describes a different economy from one built a decade earlier, because households do not spend their rupee in fixed proportion across the decade.

• The weights move with the base year: the February 2026 series prices what households actually bought in and around 2024.
• Year-on-year rates are computed from index levels in both years, so the reference pair changes when the base changes.
• Index levels before the cutover are not comparable with levels after it; rates are the only continuous series across the change.
• The Reserve Bank of India flagged the transition to the new series in its February 6, 2026 policy statement.

The practical consequence is that the first release on a new base should be read for its rate, not its level. A 3.21% year-on-year inflation rate on the new series is a rate of change of a rebased basket, and it is not directly subtractable from, or comparable with, a rate computed on the old one. Comparisons that cross the changeover will look tighter or looser than the underlying experience, depending on where each side of it sits.

Two other qualifiers belong in the same breath. The February figure is provisional: the first estimate of a month is compiled from a partial data return and is revised. And the rural-urban split in the same release, 3.37% against 3.02%, is a difference of composition rather than of price: the rural basket carries a heavier food weight, so a food move shows up there first and harder.