SF Prep Notes

MoSPI releases Discussion Paper 2.0 on treating free PDS items in CPI

On 4 October 2025, the Statistics Ministry released Discussion Paper 2.0 on how free Public Distribution System (PDS) foodgrains should be treated in compiling the Consumer Price Index, as part of the CPI base revision.

Summary

On 4 October 2025, the Ministry of Statistics and Programme Implementation (MoSPI) released Discussion Paper 2.0 on 'The Treatment of Free PDS Items in Consumer Price Index (CPI) Compilation' and invited comments. MoSPI is revising the CPI base, including wider price collection, better methods and new data sources. Since the Centre began free foodgrain distribution on 1 January 2023, covering 75% of the rural and 50% of the urban population, the question of how to reflect free items in CPI and inflation has become important. MoSPI discussed the issue with national and international experts, the RBI, the IMF and UN bodies. It held a brainstorming session on 20 November 2024 and published the first discussion note in December 2024. Paper 2.0 reflects the feedback from those consultations.

Key facts

Issue
How to reflect free PDS foodgrains in CPI
Free grain scheme
From 1 Jan 2023; 75% rural, 50% urban population
Earlier
Brainstorming 20 Nov 2024; 1st discussion note Dec 2024
Context
CPI base revision by MoSPI

Practice MCQs 2 questions

Q1 Advanced

According to MoSPI, the free foodgrain distribution scheme launched on 1 January 2023 covers what share of the population?

Show answer

Correct answer: B — 75% rural and 50% urban

PIB (MoSPI): the free food grain distribution scheme launched by the Government of India from 1 January 2023 covers 75% of the rural and 50% of the urban population.

Q2

Which body released the Discussion Paper 2.0 on 'The Treatment of Free PDS Items in CPI Compilation' in October 2025?

Show answer

Correct answer: A — Ministry of Statistics and Programme Implementation

PIB: the Ministry of Statistics and Programme Implementation (MoSPI), which is conducting the CPI base revision, released Discussion Paper 2.0 and invited comments.

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