CITU Condemns Move to Change CPI Calculation Method, Says it Will Directly Hit Workers

New Delhi: The Centre of Indian Trade Unions (CITU) has condemned the Narendra Modi government’s move to change the methodology for calculating the Consumer Price Index (CPI), which will directly affect workers. The proposed changes are being brought without consulting any consultation with workers’ representatives or central trade unions.

“CPI, particularly the CPI for Industrial Workers (CPI-IW), was evolved to measure how rising prices affect the minimum living requirements of workers. However, the present methodological direction prioritises pro-corporate monetary policy frameworks guided by the International Monetary Fund (IMF), while completely ignoring the bread-and-butter issues of workers. This represents a heinous structurally distorted alteration with far-reaching implications,” CITU said in a press statement issued by its general secretary Elamaram Kareem.

The government proposes to change the methodology to calculate CPI that will “systematically convert CPI from a class-specific cost-of-living index into a macroeconomic statistical jugglery and directly undermine wage and income protection of workers, pensioners and all wage-dependent sections”, the CITU said.

Read the full press statement below:

5th February 2026

PRESS RELEASE 

CITU DENOUNCES THE 2024 CONSUMER PRICE INDEX CONSTRUCTED WITH VICIOUS METHODOLOGIES AND REDUCED FOOD-CLOTHING-EDUCATION WEIGHT

The Centre of Indian Trade Unions (CITU) records its vehement opposition to the proposed changes in the methodology for calculation of the Consumer Price Index (CPI), as these changes systematically convert CPI from a class-specific cost-of-living index into a macroeconomic statistical jugglery and directly undermine wage and income protection of workers, pensioners and all wage-dependent sections. CPI, particularly the CPI for Industrial Workers (CPI-IW), was evolved to measure how rising prices affect the minimum living requirements of workers. However, the present methodological direction prioritises pro-corporate monetary policy frameworks guided by the International Monetary Fund (IMF), while completely ignoring the bread-and-butter issues of workers. This represents a heinous structurally distorted alteration with far-reaching implications.

This change fundamentally alters the very purpose of CPI and renders it inappropriate for wage indexation and Dearness Allowance (DA), which are meant to protect workers against price rise, not to serve fiscal or monetary convenience. CITU’s opposition is not rooted in abstract technical disagreement, but in the concrete and adverse consequences of the revised methodology for working-class households.

The CPI is proposed to be revised by the Ministry of Statistics & Programme Implementation (MoSPI) based on the recommendations of an Expert Group headed by Ashish Kumar, which met 13 times between April 2023 and December 2025 and submitted its report on 29 January 2026, without holding any consultation with workers’ representatives or Central Trade Unions, thereby exposing its biased and exclusionary approach. CITU urges the Union Government to put on hold the implementation of the new CPI series proposed to be announced on 12th February 2026 and to convene consultations with the Central Trade Unions to evolve a consensus on the new series.

CITU opposes the revision of the consumption basket and weights based on aggregated household consumption surveys that dilute the consumption pattern of workers. Earlier CPI baskets reflected observed working-class consumption, whereas the new basket is derived from recent household consumption surveys that under-represent informal workers and reflect averaged consumption across all income classes. As per the revamped combined weights, Food & Beverages has been reduced from 45.86 to 36.75 (by 9.11), Clothing & Footwear from 6.53 to 6.38 (by 0.15), and Education Services from 4.46 to 3.33 (by 1.13). Thus, the combined weightage of these basic and indispensable items has been deliberately reduced by over 10.39 points, despite the fact that these groups constitute the most unavoidable components of consumption expenditure for the overwhelming majority of the workforce. These components have witnessed sharp price increases and absorb most of workers’ earnings. Despite this reality, the weights on these indispensable items have been slashed.

Since food and basic necessities constitute the largest share of expenditure for workers, lowering their weight mechanically suppresses headline inflation during periods when workers face the sharpest price rise. This is not a neutral statistical adjustment, but a structural attack against the working class, exposing the pro-corporate bias of the Government.

This, in turn, enables employers to save enormous amounts through minimal or reduced Dearness Allowance payments for all sections of salaried working people. The basket size has also been expanded by including an additional 59 items, raising the total number of items to 358 from 299, with the inclusion of 49 additional items in goods and 10 items in services. Even in this exercise, essential items have been grossly under-rated to accommodate items such as international airfares and other non-essentials that are irrelevant to the vast majority of workers. The motive and purpose are clearly to artificially under-rate the Consumer Price Index.

The revised methodology assumes that consumers respond to price rise by substituting expensive items with cheaper alternatives. For workers, consumption is largely inelastic in nature; any reduction in consumption reflects distress and compulsion, not choice. CITU therefore objects to the application of “quality adjustment methods” and the frequent replacement of items in the CPI basket. While such methods may be relevant for consumer durables used by higher-income groups, they are meaningless for essential goods and services.

CITU further opposes the changing pattern of price collection and the adoption of the 2018 Classification of Individual Consumption According to Purpose (COICOP). These methods increasingly rely on organised retail, standardised outlets and digital e-commerce price data. Workers and the poor largely depend on local markets, informal retail, public distribution systems and informal housing, where prices are often higher and more volatile. Excluding or under-representing these price points disconnects CPI from the lived price reality of the working class.

CITU also opposes the repeated and frequent base-year changes and the statistical linking of old and new CPI series, which break historical continuity and weaken long-term measurement of cost of living. Each base revision effectively resets accumulated inflation and erodes the basis on which DA and wages have been negotiated over decades.

The Annual Survey of Industries reveals that the share of wages in net value added has fallen sharply from 30.27 per cent in 1981–82 to 15.97 per cent in 2023–24, while employers’ profit share has risen from 23.39 per cent to 51.01 per cent during the same period. The new CPI series, by negatively altering weights, will further boost profits and intensify the squeeze on workers’ wages. At a time when the Indian economy is already facing severe demand constraints due to declining purchasing power of the masses, these changes will further aggravate the crisis. Prices rise immediately, but compensation is delayed, reduced or denied altogether; inflation is not eliminated, but is instead transferred to workers and pensioners through statistical redesign.

CITU calls upon the working people of India to intensify the campaign against the anti-worker 2024 new Consumer Price Index series as part of the ongoing mobilisation for the 12th February General Strike, and to make the strike a resounding success to halt the new series along with other demands of the General Strike.

Issued by,

Elamaram Kareem

General Secretary. CITU