Скачать или смотреть CPI Base Year Revision 2024 | Linking Factor, COICOP, Elementary Index | UPSC Current Affairs

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In this session, we discuss the Consumer Price Index (CPI) Base Year Revision 2024, an important topic for UPSC Prelims and Mains, State PSC, and other competitive exams.

This video explains:

✔️ What is CPI and how it is calculated
✔️ Concept of Base Year in CPI
✔️ Laspeyres Index method (Fixed Basket Method)
✔️ Why CPI may overestimate inflation
✔️ Linking Factor – Why it is used and how it is calculated
✔️ Elementary Index and Javons Index
✔️ COICOP 2018 Classification adopted in new CPI series
✔️ CPI 2012 vs CPI 2024 – Key Differences

🔹 What is Consumer Price Index (CPI)?

CPI tracks the price changes of goods and services consumed by households. It measures inflation by comparing the cost of a fixed basket of goods in a given year with the base year.

India follows the Laspeyres Index method, which assumes fixed quantities of goods and services. This may lead to overestimation of inflation because consumption patterns change when prices rise.

🔹 CPI Base Year Revision 2024 – Key Updates

New Base Year: 2024

Previous Base Year: 2012 (revised in 2015)

Based on Household Consumer Expenditure Survey 2024

Published Monthly by National Statistical Office (NSO)

For:

CPI Combined

CPI Rural

CPI Urban

Other CPIs:

CPI for Industrial Workers (Base Year: 2016) – Published by Labour Bureau

CPI for Agricultural & Rural Labourers (Base Year: 2019)

🔹 Major Structural Changes

✅ Divisions increased from 6 groups (2012 series) to 12 divisions (2024 series)
✅ Based on COICOP 2018 (UN Classification)
✅ Inclusion of e-commerce prices
✅ Better international comparability
✅ 358 items in new basket

🔹 Weightage Changes (Important for Prelims)

Food & Beverages – Decreased

Housing – Increased

Clothing – Slightly Decreased

Transport – Now major category

Health – Significant weightage

🔹 Linking Factor (Very Important for Prelims)

Linking factor is used to compare old CPI series with the new base year series.

It is calculated using an overlapping year (2025 in this case) and helps convert old index values into the new base year format.

🔹 Technical Concepts to Remember

Laspeyres Index (Fixed Basket Method)

Geometric Mean

Elementary Index

Javons Index (used for compiling elementary indices)

COICOP 2018 Classification

📌 Highly important for:

UPSC Prelims (Indices, Publishing Authority, Base Year, Linking Factor)

UPSC Mains (Impact of CPI revision on inflation measurement)

State PSC Exams

Economy Current Affairs

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