New Delhi: According to figures released by the Ministry of Statistics on Wednesday, India’s retail inflation rate, based on the Consumer Price Index, fell to a five-month low of 4.31 percent in January as prices of vegetables and pulses eased. This relief to household budgets was reflected in the figures.

The easing of inflation reflects a steadily declining trend. After touching a 14-month high of 6.21 percent in October, CPI inflation declined to 5.48 percent in November and 5.22 percent in December.

The food inflation at 6.02 percent in January 2025 is the lowest after August 2024.

“The significant decline in headline inflation and food inflation during the month of January is mainly attributed to the decline in inflation of vegetables, egg, pulses, cereals, education, clothing and health,” according to an official statement.

The top five items showing the highest year on year Inflation at the All India level in January are coconut oil (54.20 per cent), potato (49.61 per cent), coconut (38.71 pe cent), garlic (30.65 percent), peas [vegetables] (30.17 percent).

The key items with the lowest year-on-year inflation in January 2025 are Zeera (-32.25 percent), ginger (-30.92 percent), dry chillies (-11.27 percent), brinjal (-9.94 percent), and LPG (excl. conveyance) (-9.29 percent).

The year-on-year fuel and light inflation rate for January is -1.38 percent. As fuel prices have been coming down, the corresponding inflation rate for December 2024 was -1.33 percent.

RBI Governor Sanjay Malhotra announced on Friday a 25 basis cut in the policy rate from 6.5 per cent to 6.25 per cent in the monetary policy review to accelerate growth amid global uncertainties.

He said that inflation has declined and is expected to further moderate and gradually align with the RBI’s target.

The monetary policy decision maintains a delicate balance between controlling inflation and pushing up the growth rate in a slowing economy,

The MPC also unanimously decided to continue with its neutral stance in monetary policy and will focus on inflation while supporting growth. This would provide flexibility to respond to the macroeconomic environment, Malhotra said.

Now, with retail inflation continuing with its downward trend, the RBI will have more headroom to follow a soft money policy to make more credit available to businesses and consumers, which will propel economic growth.

 

 

 

 

 

 

 

 

–IANS