The HCES, which provides information and data on spending, is a key source of input for deciding of weights and shares for the composition of the inflation basket. The National Statistical Office conducts the household consumer expenditure survey every five years. The share of processed food and beverages has gone up nearly 2 percentage points both in rural and urban areas. Urban spending fell 3.5 percentage points compared with the 2011-12 data. "Given the new weights in rural consumption and assuming a 10% inflation in food and 5% inflation in non-food items, the inflation as per new weights would be 30-40 bps (basis points) lower than 2011-12 weights," said Paras Jasrai, senior analyst, India Ratings and Research.

Source: Economic Times February 26, 2024 13:35 UTC