How to Calculate CPI: A Step-by-step Process

What Is CPI?

What Is the Formula to Calculate CPI?

How to Calculate the Consumer Price Index?

What Are the Examples of Calculating CPI?

Let us understand how to calculate CPI using an example. The table below shows the change in a basket of goods in the year 2023 with respect to that in the year 2012:

Item Quantity Price in 2012 Price in 2023
Maize 100 ₹ 1,200 ₹ 1,600
Corn 50 ₹ 1,360 ₹ 1,680
Bread 50 ₹ 800 ₹ 800
Wheat 150 ₹ 560 ₹ 960

Total costs of the basket in 2012= ₹ (100*1200+ 50*1360+ 50*800+ 150*560) = ₹ 3,12,000

Total costs of the basket in 2021= ₹ (100*1,600+ 50*1,680+ 50*800+ 1500*960)= ₹ 4,28,000

Hence, consumer price index= 4,28,000/ 3,12,000 * 100= 137.18 (approx.)


FAQs About How to Calculate CPI

What is the need for calculating CPI?

One can calculate CPI or consumer price index to determine the cost of living for a specific area. Further, it also helps assess an inflation and deflation scenario in an economy.

Who is responsible for calculating CPI in our country?

The MoSPI (Ministry of Statistics and Programme Implementation) and PSD (Price Statistics Division) of the NSO (National Statistical Office) is responsible for calculating CPI for urban, rural and other sectors on a monthly basis.

What is the present-day CPI in India?

As per a report, the CPI dropped to a one-year low of 5.72% in December 2022.

What are the types of CPI in India?


There are four types of CPI in India. These are as follows:

  • CPI for Industrial Worker
  • CPI for Rural Labourer
  • CPI for Agricultural Labourer
  • CPI (Urban/ Rural/ Combined)