Online prices in 12 cities to be monitored for new CPI series

New Delhi: The government has identified 12 cities with a population of more than 2.5 million each to monitor e-commerce price trends as part of efforts to accurately capture changing consumption patterns in the new Consumer Price Index (CPI) series, which is scheduled for release in 2026, said people aware of the development.

In each of these cities, prices of a particular item charged by the leading seller in that city will be noted. For instance, rice prices in Lucknow could be tracked via BigBasket, while in Bengaluru it might be Amazon, said an official, who did not wish to be identified.

The updated CPI series will expand coverage to 2,900 markets, up from the current 1,181 rural and 1,114 urban markets, the people told ET.

The base year for the price series will shift to 2024 from 2012, while the weights of items in the index will be derived from the Household Consumption Expenditure Survey (HCES) 2022-23.

The new series will avoid redistribution of weights. "There will be no redistribution of weights in the new series," the official said.

To incorporate changing consumption patterns in the CPI, weights are often redistributed. However, this can lead to overestimation as reallocating weight to another commodity may inaccurately represent its actual share in the consumption basket.

"It could be that the composition and weights must be fairly representative and in accordance with HCES 2011-12, which is why they have decided on exclusion of redistribution of weights," said Madan Sabnavis, chief economist at Bank of Baroda.

Gaura Sengupta, chief economist at IDFC First Bank, said this is done to avoid volatility in the index.

The statistics and programme implementation ministry aims to enhance market coverage across sectors. The new series will also track prices of online streaming services (OTT platforms), as well as rail and air fares.

The ministry had written to e-commerce and quick commerce companies such as Amazon, BigBasket, Zepto, Flipkart and Zomato nearly two years ago, seeking access to pricing data. However, none of them agreed to share the information owing to concerns around privacy and business strategy confidentiality.

The ministry is exploring the use of scanner data, which has been incorporated by many European countries. Efforts are underway to directly procure scanner data from retail organisations, the official said.

Web scraping is also being explored, it poses some challenges, according to the official.

The ministry is also consulting international organisations, including the World Bank and the International Monetary Fund, ET had reported earlier.