Reading inflation data
How to read a CPI release: the index and the rate, this month against last year, provisional against final
CPI figures up to September 2026, released by MoSPI on 12 October 2026
Verified 16 October 2026
For training and education only. Not investment advice.
Trainer notes
Ask: inflation went from 4.38% in June to 4.45% in July 2026. Did prices barely move in July? Most people will say yes. In fact prices rose faster in July than in most months; slide 5 shows why the rate hardly moved. Ask: inflation went from 4.38% in June to 4.45% in July 2026. Did prices barely move in July? Most people will say yes. In fact prices rose faster in July than in most months; slide 5 shows why the rate hardly moved. The October 2026 CPI is due on 12 November 2026: update slides 3, 4, 6, 7, 8, 10 and 12 then.
The inflation rate compares this month's prices with the same month a year ago. So last year's prices move it.
So the rate can rise while prices rise slowly, or barely move while prices rise fast. Reading the index alongside the rate shows which is happening.
Trainer notes
The headline number is a comparison of two price levels twelve months apart. Anything that happened to prices in the comparison month last year affects this year's rate. That is all the 'base effect' means.
Four terms in every CPI release
The index
A number that tracks the cost of a fixed basket. It is set to 100 for the year 2024. September 2026: 109.49.
Year-on-year rate
The index against the same month a year earlier. This is the headline inflation figure: 5.54% for September 2026.
Monthly change
The index against the month before. It is not the headline figure, but anyone can work it out from two index values.
Provisional, final
Each month's figure is first provisional and is made final a month later. August 2026: 4.82% first, 4.83% final.
Sources: MoSPI CPI press releases (base 2024=100) for August 2026 (14 Sep 2026) and September 2026 (12 Oct 2026).
Trainer notes
CPI is compiled by MoSPI, the Ministry of Statistics and Programme Implementation, and released around the 12th of the following month. MoSPI computes rates from unrounded indices and publishes indices rounded to two decimals, so a rate worked out from the published index can differ from MoSPI's by 0.01 point. January 2026 is another example of a revision: 2.75% provisional, 2.74% final.
Reading the September 2026 figure
SEPTEMBER 2026
All India CPI, rural and urban combined.
Index: August 2026 108.74, September 2026 109.49.
A year earlier: August 2025 103.74, September 2025 103.74.
- Year on year: 109.49 ÷ 103.74 = 1.0554. Inflation is 5.54%, the provisional figure MoSPI published.
- This month: 109.49 ÷ 108.74 = 1.0069. Prices rose 0.69% during September 2026.
- A year ago the index did not move from August to September 2025. It was 103.74 in both months.
- With the base unchanged, the rate rose by about this month's price rise: 0.71 point, from 4.83% to 5.54%.
Result: When last year's index was flat, this month's price rise passes almost straight into the rate.
Actual figures: MoSPI CPI release for September 2026, 12 Oct 2026. September 2026 is provisional.
Trainer notes
The rise in the rate (0.71 point) is a little more than the monthly rise (0.69%) because the two are multiplied, not added. Always say which month and whether it is provisional. The August 2026 figure here is the final 4.83%, not the provisional 4.82% first published.
The base effect: July 2026
JULY 2026
Index: June 2026 107.00, July 2026 107.95.
A year earlier: June 2025 102.51, July 2025 103.35.
- This month: 107.95 ÷ 107.00 = 1.0089. Prices rose 0.89% in July 2026.
- A year ago: 103.35 ÷ 102.51 = 1.0082. Prices had also risen 0.82% in July 2025.
- The rate compares 107.95 with 103.35: 1.0445, so inflation is 4.45%.
- It rose only 0.07 point from June's 4.38%, because the base had risen almost as much as prices did.
Result: A large price rise a year ago holds this year's rate down. That is the base effect.
Actual figures: MoSPI CPI (base 2024=100), All India Combined, release of 12 Oct 2026 (Annexure IV).
Trainer notes
Return to the opening question. Prices rose faster in July 2026 than in September 2026 (0.89% against 0.69%), yet the rate rose far less in July. The difference is entirely last year's base. The effect works both ways: a fall in the index a year ago pushes this year's rate up.
This month against a year ago
| 2025 | 2026 | |
|---|---|---|
| Feb | -0.34 | 0.11 |
| Mar | 0.07 | 0.26 |
| Apr | 0.19 | 0.27 |
| May | 0.32 | 0.75 |
| Jun | 0.60 | 1.03 |
| Jul | 0.82 | 0.89 |
| Aug | 0.38 | 0.73 |
| Sep | 0.00 | 0.69 |
Read the chart
- When the 2026 bar is taller than the 2025 bar, the yearly rate goes up that month.
- When it is shorter, the rate goes down, even though prices are still rising.
- July: 0.89% against 0.82%. The rate rose only from 4.38% to 4.45%.
- September: 0.69% against 0.00%. The rate rose from 4.83% to 5.54%.
Source: computed from MoSPI CPI indices (base 2024=100, All India Combined), release of 12 Oct 2026, Annexure IV. September 2026 is provisional.
Trainer notes
The rule on this chart is exact: the year-on-year rate rises in a month if and only if the index rose more that month than in the same month a year earlier. To read next month's number, look at what the index did in the same month last year; this is arithmetic, not a forecast. In 2026 every bar from February to September is taller, which is why the rate rose in each of those months.
Which inflation number is which
| Measure | What it covers | Latest |
|---|---|---|
| CPI, combined | Prices households pay, rural and urban together. The headline figure, and the index in which RBI's 4% target is set. | 5.54% (Sep) |
| Rural and urban CPI | The same kind of basket, priced separately in villages and in towns. | 6.08% / 4.88% (Sep) |
| Food (CFPI) | MoSPI's Consumer Food Price Index. Food prices can swing more than the rest of the basket. | 7.74% (Sep) |
| Core inflation | CPI without food and beverages and fuel, as RBI defines it. MoSPI's CPI release gives no core figure. | 4.2% (Aug) |
| WPI | Wholesale prices of goods: primary articles, fuel and power, manufactured products. Base 2022-23. | 11.39% (Sep) |
Sources: MoSPI CPI release, 12 Oct 2026; DPIIT WPI release, 14 Oct 2026; RBI Governor's Statement, 7 Oct 2026 (core); RBI monetary policy overview (target).
Trainer notes
WPI is compiled by the Office of the Economic Adviser in DPIIT, the Department for Promotion of Industry and Internal Trade, and released on the 14th. CPI and WPI price different baskets at different stages, so they can move far apart. Do not add or average them. The 'Latest' figures for September are provisional.
Where things stand
Latest official figures. September figures are provisional and can be revised next month.
- CPI INFLATION
- 5.54%September 2026, up from 4.83% in August. Index 109.49.
- FOOD (CFPI)
- 7.74%September 2026, up from 5.97% in August.
- WPI INFLATION
- 11.4%Sep 2026: 11.39% (base 2022-23), up from 9.92% in Aug (provisional).
- NEXT CPI RELEASE
- 12 NovOctober 2026 figures: 12 November 2026, or the next working day.
Sources: MoSPI CPI press release for September 2026, 12 Oct 2026; DPIIT Office of the Economic Adviser, WPI press release for September 2026, 14 Oct 2026.
Trainer notes
These are official statistics, not market prices, so they are the latest available. State the figure, the month and whether it is provisional, and stop. We do not say where inflation is heading. RBI's own projection, 5.2% for 2026-27, may be quoted as RBI's.
If you learnt this from older material
What older decks say
- Inflation is quoted from a weekly Wholesale Price Index.
- The CPI has base year 2012 or earlier.
- WPI is on base year 2011-12 or an earlier base.
- There is no formal inflation target.
What holds now
- Headline WPI is monthly. Weekly food data stopped in Feb 2012.
- CPI base year is 2024, from the release of 12 February 2026.
- WPI base year is 2022-23 from 15 June 2026, with 957 items in place of 697.
- RBI's target is 4% CPI inflation, within 2% to 6%, since August 2016.
Sources: MoSPI CPI release, 12 Feb 2026; DPIIT note for WPI users, 1 Jun 2026, and WPI FAQs; RBI monetary policy overview; PTI report, 2 Feb 2012 (weekly WPI).
Trainer notes
The end of the weekly WPI comes from a press report of the Commerce Ministry's statement, not a primary document. The headline measure people quote today is CPI, because that is the index in which the Government sets RBI's target. Rates on the old and new bases are not like for like; MoSPI links them only at the general index level.
Four things people get wrong
Misconception'The rate barely moved, so prices did too.'
What is trueIt may be the base. In July 2026 prices rose 0.89% in the month, yet the rate rose only 0.07 point.
Misconception'CPI and WPI should match.'
What is trueThey price different baskets at different stages. For September 2026, CPI showed 5.54% and WPI 11.39%.
Misconception'Provisional means unreliable.'
What is trueIt means first estimate, made final a month later. August 2026 moved from 4.82% provisional to 4.83% final.
Misconception'5.54% means my costs rose 5.54%.'
What is trueIt is an average for the country. In the same month rural CPI showed 6.08% and urban CPI 4.88%.
Sources: MoSPI CPI releases, 14 Sep and 12 Oct 2026; DPIIT WPI release, 14 Oct 2026.
Trainer notes
Revisions in the months checked were 0.01 point at most, and some months are not revised at all (July 2026 stayed at 4.45%). We have shown two examples, not a rule. Each household's basket differs from the national one. Do not tell a client the official figure is wrong, and do not tell them their own experience is wrong either. Each household's basket differs from the national one. Do not tell a client the official figure is wrong, and do not tell them their own experience is wrong either.
Reading a CPI release in four steps
Note the month and status
Which month, and is it provisional or final? Each release gives the latest month provisional and the one before final.
Read the rate and the index
The rate is the headline. The index lets you check it: this year's index ÷ last year's, minus 1.
Find this month's change
Divide this month's index by last month's. That is how much prices moved in the month itself.
Check the base
Do the same for the same month a year ago. If last year's rise was bigger, the rate falls; if smaller, it rises.
Take-away: We explain the numbers. We do not say where inflation or interest rates are heading.
Source: MoSPI CPI press releases (base 2024=100), format as of the release of 12 Oct 2026.
Trainer notes
This is the slide to rehearse. When a client quotes a headline from the news, these four steps are the conversation. The index values are in Annexure IV of each MoSPI release.
Check yourself
Question 1: An index is 120.0 this month and was 115.0 in the same month last year (assumed figures). What is the year-on-year inflation rate?
Answer: 120.0 ÷ 115.0 = 1.0435, so about 4.35%.Question 2: Prices rise 0.5% this month. In the same month last year they rose 0.8% (assumed figures). Does the yearly rate go up or down?
Answer: Down. The rate rises only when this month's change is larger than the change in the same month a year ago. Here the base rose more.Question 3: A client says WPI inflation is 11.39%, so household costs must be up 11%. What would you explain?
Answer: WPI tracks wholesale prices of goods, not what households pay. The household measure is CPI: 5.54% for September 2026, provisional. And each household's basket differs from the average.
Trainer notes
Question 2 is the base effect in one line. If anyone gets it wrong, go back to the chart slide.
Sources and disclaimer
Sources for the figures in this explainer
- CPI and CFPI rates, rural and urban rates, and index values from January 2025 to September 2026: MoSPI CPI press release for September 2026 (base 2024=100), 12 Oct 2026.
- August 2026 provisional rate: MoSPI CPI press release, 14 Sep 2026. CPI 2024 series and January 2026 provisional rate: MoSPI first release on base 2024=100, 12 Feb 2026.
- WPI for September 2026 and August 2026, base 2022-23: DPIIT Office of the Economic Adviser, press release of 14 Oct 2026; note for WPI users, 1 Jun 2026; WPI FAQs.
- Core inflation and its definition: RBI Governor's Statement, 7 Oct 2026. Inflation target: RBI, monetary policy overview on rbi.org.in.
- End of the weekly WPI release: PTI report of the Commerce Ministry statement, 2 Feb 2012 (secondary source).
- Monthly changes on slides 4 to 6 are computed from MoSPI's published indices. Quiz figures are assumed.
This material is for training and investor education only. It is not investment, tax or legal advice and is not a recommendation to buy, sell or hold any security or scheme. Examples use assumed figures unless a source and date are shown. Mutual fund investments are subject to market risks; read all scheme related documents carefully. Trustner Asset Services Pvt. Ltd. is an AMFI-registered Mutual Fund Distributor (ARN-286886).