Inflation: The Price of Nearly Everything
Retail inflation since 2014. MoSPI, Consumer Price Index; 2012 series<br>to 2025, 2024 series from 2026. Part I · The number and you<br>On 13 July 2026 the Ministry of Statistics published the number it publishes every<br>month: retail inflation. Prices in India, taken together, were<br>4.38% higher than they had been a year<br>earlier.1 The evening bulletins read it out, the<br>papers filed it beside the month before, and by morning it had settled into the corner of<br>the page where numbers go to be believed.<br>If you were a parent in Delhi that week, holding a school-fee circular, belief may have<br>come harder. By the government’s own count, the cost of education in the capital was<br>running 10.54% above last year, more than double the all-India<br>pace,2 and the fight over fee hikes had already<br>produced a new law and a High Court<br>order.45<br>None of that turmoil is visible in the 4.38 percent.
Education in Delhi against the all-India average, year on year; the shaded<br>column is the gap, at least double in every month so far. MoSPI, Consumer Price<br>Index. Both numbers are honest. The school bill answers a question<br>about one kind of spending in one city. The number on the news answers a stranger<br>question: what happened to the price of nearly everything, everywhere, averaged across<br>everyone. Economists call it headline inflation, because it<br>is the one that makes the headlines. The rest of this piece is<br>about how that answer gets made, and how it can land so far from the one your own life<br>gives, in either direction, without anyone lying to you. It starts where the number<br>itself starts, with a shopping basket.<br>The basket<br>Ask the ministry what inflation measures and the answer is a basket: 358 kinds of things<br>Indian households buy, from rice to bus fares to a streaming subscription.3<br>Each item carries a weight, its share of the average household’s spending, taken from<br>a national survey of what households actually consume. Food and beverages carry<br>₹36.75 of every ₹100; housing, water and fuel<br>carry ₹17.66; everything else divides what remains. Multiply each price change<br>by its weight, add it all up, and the sum, near enough, is the headline number.<br>Strictly there is not one basket but two. Rural and<br>urban India are surveyed separately, and they spend<br>differently: food is ₹41.98 of the rural<br>hundred and ₹30.25 of the urban one. The<br>number on the news is a blend of both.
Each division’s share of the rural<br>₹100 against its share of the urban one, 2024<br>basket, sorted by the gap between the two. MoSPI, HCES weights. The important thing about the official basket is that no household actually divides its<br>hundred this way. Below is the real basket with its real weights<br>and each division’s latest rate of inflation. The sliders are yours, and they hold<br>one shared ₹100. Set the mix to the way your own month actually goes, and watch<br>your number walk away from<br>the headline.
The official basket, yours to reweight; the line traces your number against<br>the headline. MoSPI, June 2026. Whatever you set, you are still pricing today’s spending habits. Habits drift, and<br>every decade or so the basket is rebuilt from scratch to keep up. The latest rebuild<br>arrived with the January 2026 bulletin, after thirteen years on the old basket: a fresh<br>survey, fresh weights, fresh categories, and a fresh year to count from, with prices now<br>measured against 2024 instead of 2012. The list of what was thrown out is a country<br>cleaning out a drawer.<br>The portrait<br>Out went the video cassette recorder, the audio cassette, the tape recorder, the radio<br>set, second-hand clothing, coir rope. In came streaming subscriptions, pen drives, piped<br>cooking gas, the babysitter, the home exercise equipment, and, measured for the first<br>time, the rent a rural household pays.3 The 299 items of the 2012 basket<br>became 358, sorted for the first time into the twelve divisions of COICOP, the United<br>Nations classification most of the world’s statistical agencies use, so<br>India’s inflation is now stated in the same categories as nearly everyone<br>else’s. A basket is a measuring instrument, but the two lists together are also a<br>portrait: a decade of Indian life, recorded in what a statistician decided was worth<br>pricing.<br>The weights moved with the habits, and one move matters more than all the others. Food’s<br>share of the average wallet fell from ₹42.62 to ₹36.75 of every<br>₹100, the largest fall in the basket.3<br>It is the usual signature of a country getting richer: as households earn more, food<br>takes a smaller share of what they spend.
The 2012 and 2024 CPI baskets, both restated on the 2024 classification<br>(MoSPI, HCES weights). None of this rewrites a price anyone paid. The part of a rebuild that genuinely<br>changes the number is the weights, the same dials the basket figure above put in your<br>hands.<br>A basket, in the end, is a shopping list, and the headline is what the list turns into<br>once every item on it has...