New CPI Series to Include Rural Housing Inflation Starting February 2026
The new consumer price index (CPI) series will now include housing inflation in rural areas, reflecting changing consumption patterns and the growth of rental markets outside urban centers, according to official sources. Currently, housing is only considered in urban inflation measurements due to the very small number of rented homes in rural areas.
“Over the past few years, it has been observed in consumption surveys that people are spending on house rent in rural areas as well. While people traditionally spent on housing in urban areas only, a change in preference and increased mobility for work and other reasons means that the housing market is also flourishing in rural areas,” one of the sources said. The new CPI series with an updated base year is slated to come into effect in February 2026, along with a new series for other macro indicators like gross domestic product and index of industrial production.
The statistics ministry will use 2024 as the base year for the upcoming CPI series. The new series is being developed using data from the Household Consumption Expenditure Survey (HCES) 2022-23, released last year. The HCES 2022-23 revealed that the average monthly per capita expenditure (MPCE) on “housing” in rural areas rose nearly fivefold, reaching ₹30 compared to ₹7 in the previous HCES conducted in 2011-12. Additionally, housing’s share of total expenditure doubled from 0.4 percent to 0.8 percent during this period.
In contrast, the average MPCE on housing in urban areas stood at ₹423 in 2022-23 from ₹160 in 2011-12. As a share of total expenditure, it stood at 6.6 per cent in 2022-23. Paras Jasrai, senior economic analyst, India Ratings, said that the move to include housing inflation will help better capture data on parameters like housing rental and better track the real estate market in rural areas.
“Though the real estate market in rural areas is quite nascent, it is a welcome move. However, it won’t have much impact on the retail inflation figure, as the weight is going to be quite low. Also, both the central and state governments run subsidised housing programmes to keep prices in check. Hence, there should be methodological clarity on how to resolve these issues,” he added.
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