NEW DELHI, Nov. 4 -- India is preparing to overhaul how housing inflation is measured-a technical but far-reaching change that could redefine how the country tracks price pressures and living costs. The ministry of statistics and Programme Implementation (MoSPI) plans to modernize the housing component of the Consumer Price Index (CPI), making it more reflective of real-world rental dynamics as housing markets expand beyond major cities and rents surge in the post-pandemic economy.

Economists say the reform could mark the most consequential change in inflation measurement since the last CPI revision more than a decade ago, potentially altering how policymakers, investors, and households interpret the cost of living.

MoSPI has proposed c...