India is modernizing its method for calculating inflation by directly sourcing price data from major e-commerce platforms like Amazon and Flipkart. The initiative, led by the Ministry of Statistics, aims to make the benchmark Consumer Price Index (CPI) more accurate by capturing the nation’s rapidly shifting consumption habits. This move aligns with a global trend, as countries including the U.S. and South Korea are increasingly integrating online and scanner data into their official inflation measures to better reflect how citizens shop.
The government is currently scraping prices from websites and is in negotiations with companies to access data directly for goods sold in 12 major cities. This data will be cross-checked against a broader dataset to ensure its accuracy. The new information will be formally incorporated into a revised CPI series early next year, which will also see updated spending weightages based on a recent survey that showed Indians are spending a lower share of their budget on food.
This inflation index overhaul is part of a broader two-year plan for major statistical upgrades across India’s economic data. Other key initiatives include launching a new GDP series with an updated base year and the development of a first-ever quarterly Index of Services Production to better track the dominant services sector. These efforts are designed to provide a more precise and timely picture of the economy for policymakers and investors.
Furthermore, the statistics ministry has bolstered other surveys in response to critiques, nearly doubling the sample size for its monthly employment reports to improve their robustness and precision. Secretary Saurabh Garg emphasized that these enhancements are aligned with internationally recognized standards, ensuring the data’s credibility and comparability on a global stage.
