MoSPI Seeks Feedback on Major Change to Housing Component of New CPI Series
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Institutions: Ministry of Statistics and Programme Implementation (MoSPI) | Reserve Bank of India (RBI)
The Ministry of Statistics and Programme Implementation (MoSPI) is conducting a comprehensive base revision for India’s Consumer Price Index (CPI), aiming to launch a new series using a revised methodology and weights.
Key points:
Rationale for the Change: MoSPI is proposing modifications to the current method to ensure the housing index accurately reflects its movement every month. This proposal is based on feedback from stakeholders, experts, and a review of global best practices.
“Utmost Importance” for Policy: The accuracy of the housing index is considered of “utmost importance” for both policymakers and households. This is because the index captures a significant amount of household income spent on rent or maintaining owned houses: 21.67% in urban areas and 10.07% at the All-India level.
Call for Stakeholder Feedback: MoSPI is actively seeking views and comments from key stakeholders, including experts, academicians, and financial institutions.
Deadline: The deadline for submitting comments and suggestions on this methodological paper is November 20, 2025.
Context: This housing paper is the third in a series of discussion papers released as part of the CPI base revision. The earlier two papers focused on how to correctly treat free Public Distribution System (PDS) items within the CPI framework.
As the Reserve Bank of India uses the CPI as its primary anchor for Monetary Policy (inflation targeting), any methodological change to a major component like housing will directly impact the reported inflation rate and, subsequently, the RBI’s interest rate decisions. This reform is critical for enhancing the robustness and credibility of official statistics used for macroeconomic planning.
What is the Housing Index in CPI?→ The Housing Index is a major sub-component of the Consumer Price Index (CPI) that specifically measures the rate of price change over time for services related to housing. This includes costs such as house rent, repairs, and maintenance. In India’s CPI (Rural), the housing index is not compiled, but it constitutes over one-fifth of the expenditure weight in the CPI (Urban), making methodological changes highly sensitive to the final inflation rate.
Follow the full news here: Discussion paper on proposed changes in the housing index compilation methodology in the new CPI series