New CPI series likely to include rentals paid by rural households

Experts say the addition of rural rental data in the new series will likely ease the overall CPI inflation print slightly.

The new Consumer Price Index (CPI) series, set to be unveiled in February 2026, will likely include rural rental prices in its ‘housing’ segment, which is absent in the current series, two officials from the ministry of statistics and programme implementation (MoSPI) told Moneycontrol.

According to the officials, the new CPI series will incorporate weights of items based on the 2022-23 Household Consumption Expenditure Survey (HCES). And the survey shows that the share of ‘rent’ in rural households’ monthly per capita consumption expenditure (MPCE) rose to 0.8% from 0.4% (in 2011-12).

The share of rent in urban households’ MPCE, meanwhile, increased from 6.2% to 6.6% during the same period. In the extant CPI basket, with base 2012, the ‘housing’ group carries a weight of 10.07%. but in the new one, the weight is likely to reduce to around 9%, said the officials.

The present housing group contains four items— 'house rent, garage rent', 'residential building & land (cost of repairs only)', 'water charges', and 'water man charges'. 'House rent, garage rent' carries a weight of 9.5% in the current CPI basket.

The officials further noted that the new CPI series will not track prices of government housing – the houses provided by the central & state governments to its employees, as it doesn’t measure the movement of rental prices accurately. The present series does include those prices in calculating the CPI, but its weights are not specified in the list of items.

Experts say the addition of rural rental data in the new series will likely ease the overall CPI inflation print slightly. “Rental increase in rural area is likely to be softer than urban, which is already low as per the current index,” noted Gaura Sen Gupta, chief economist, IDFC FIRST Bank, adding that rental inflation tends to be lower and steadier than food inflation.

NR Bhanumurthy, director, Madras School of Economics said: “The share of rural rent (in new CPI basket) is going to be marginal, so its impact on overall inflation will be minimal in my view. However, the addition of rural rental data in CPI is only consistent with the evolving consumption trends.”