RBI Working Paper No. 01/2026: Data Gaps in State-Level Inflation: An Assessment for the Covid Period

What data gap in India’s official inflation statistics does this RBI working paper address?

The paper addresses a missing section in India’s official inflation record. State-wise CPI-U inflation figures were not available for four months during the pandemic. This matters because state-level data support inflation analysis under India’s current inflation-targeting regime.

Aggregate official inflation used imputed price indices for April and May 2020. However, the corresponding state-wise figures for April and May 2020 and April and May 2021 remained unavailable. The researchers used granular data from the RBI’s Inflation Expectations Survey of Households, or IESH, to estimate them.

The estimates provide a usable record for months that otherwise interrupt state-level inflation time series. When combined across states, the estimates closely followed the all-India official CPI inflation series. They may therefore help future research that needs continuous state-level inflation data, although the paper presents them as estimates rather than newly published official figures.

Which months of state-wise inflation data were unavailable during the Covid-19 period?

The unavailable state-wise inflation figures covered four specific pandemic months. They were April 2020, May 2020, April 2021, and May 2021. These gaps affected state-level official inflation data, even though aggregate official inflation information was available for part of the period.

For April and May 2020, India released imputed price indices at the aggregate level. The article separately identifies the state-wise figures for April and May 2020 and April and May 2021 as unavailable. The RBI paper therefore focuses on these four months rather than reconstructing the entire pandemic period.

The researchers used IESH data to derive estimates for each missing month and each state. Once aggregated, those estimates closely followed the all-India official CPI inflation series. This gives researchers a potential way to use a more complete state-level inflation time series for future work.

What is the RBI’s Inflation Expectations Survey of Households, and what information does it collect?

The Inflation Expectations Survey of Households, or IESH, is an RBI survey that collects information from households about inflation. In the paper, its granular data provide clues about inflation across states. The survey was especially useful because it continued to be conducted bimonthly and disseminated during the pandemic months.

The researchers used centre-wise distributions of urban consumers’ inflation perceptions and their inflation expectations three months ahead. They combined these survey responses with past state-wise realised CPI-U inflation figures. Together, these inputs helped produce estimates for the missing state-wise official inflation months.

IESH therefore served as an alternative information source during a period when some official state-level figures were unavailable. The article does not describe every survey question or sampling detail. It does establish that the survey supplied centre-level information on perceived inflation and expected inflation, while remaining active during the Covid period.

How did the researchers use household inflation perceptions, expectations, and past CPI data to estimate inflation for the missing months?

The researchers treated household survey responses as evidence about inflation in places where official state figures were missing. They examined centre-wise distributions of urban consumers’ inflation perceptions and their expectations for inflation three months ahead. They also used past realised CPI-U inflation for individual states.

The key mechanism was comparison and combination. Survey-based perceptions and expectations provided current information from urban consumers, while past state CPI-U figures supplied an observed inflation pattern for each state. Using these inputs together, the researchers derived estimated state-wise official inflation for April and May 2020 and April and May 2021.

These results were not presented as newly collected official price observations. They were estimates designed to bridge gaps in the published state-level record. A useful check was the national comparison: after aggregation, the state-wise estimates closely followed the all-India official CPI inflation series.

Why did the pandemic make it difficult to collect and compile official price statistics?

The pandemic made official price statistics harder to produce because restrictions were imposed across the world. These restrictions affected the collection and compilation of official statistics. Gathering price information and assembling it into regular statistical releases became difficult during the outbreak.

India responded by releasing imputed price indices at the aggregate level for April and May 2020. An imputed index uses available information to fill a measurement gap. However, the state-wise official inflation figures remained unavailable for April and May 2020 and for April and May 2021.

The disruption created a specific problem for researchers. National inflation information existed for part of the period, but the state-level record had missing months. The RBI paper used the IESH, which continued bimonthly and was disseminated during the pandemic, to derive estimates for those gaps and support more complete state-level analysis.

How could these estimated state-wise inflation figures affect future research and inflation analysis in India?

State-wise inflation estimates can help researchers avoid breaks in datasets covering the pandemic. The paper says state-wise inflation data are crucial under India’s current inflation-targeting regime. Filling the four missing months could therefore support studies that examine how inflation differed across states over time.

For example, a researcher studying a state’s inflation path could include April and May 2020 and April and May 2021 instead of leaving those observations blank. The estimates come from centre-wise urban consumers’ perceptions, three-month-ahead expectations, and past state-wise realised CPI-U inflation. When aggregated, they closely follow the all-India official series.

The figures are potentially useful for future research involving state-level inflation time series. They also offer a way to assess inflation patterns during an unusual period when official state data were unpublished. Because they are derived estimates, researchers should identify them as estimates when using them.

What is consumer price inflation, how is the CPI-U used to measure it, and why does state-level inflation matter for India’s inflation-targeting system?

Consumer price inflation is the change over time in the prices consumers pay for a representative basket of goods and services. CPI-U generally means the Consumer Price Index for urban consumers. It uses price movements for urban consumption items to produce an inflation rate. The source article uses CPI-U as the state-level measure it estimates.

For example, if a state’s CPI-U rises faster than before, its urban consumers are facing higher measured price growth. Comparing states can reveal differences that an all-India average may conceal. In this paper, past state-wise realised CPI-U figures were combined with household perceptions and expectations to estimate missing months.

State-level inflation matters because the article identifies such data as crucial under India’s inflation-targeting regime. The reconstructed figures can support regional analysis while retaining a national check: aggregated estimates closely followed official all-India CPI inflation. The article does not explain the full CPI-U basket or calculation method.

Key Facts:

📌 State-wise inflation figures were unavailable for four pandemic months.

📌 The paper estimates missing CPI-U data using RBI household survey information.

📌 Aggregated estimates closely followed all-India official CPI inflation.

📌 State-wise figures were unavailable in April and May 2020.

📌 State-wise figures were also unavailable in April and May 2021.

📌 The gap covered four pandemic months.

📌 IESH continued bimonthly during the pandemic months.