Measured by the All India Consumer Price Index (CPI), it shows the lowest year-on-year inflation rate after June, 2017.
- Further, Year-on-year inflation rate based on All India Consumer Food Price Index (CFPI) or Food Inflation stood at -1.76% in July 2025, lowest after January 2019.
Reason for the Decline
- Favourable base effect: Refers to the impact of the corresponding reference year on current growth estimates.
- Decline in inflation: In Items like Pulses and Products, Transport and communication, Vegetables, Cereal and products, Education, etc.
About CPI
- Meaning: It is the changes over time in general level of prices of goods and services that households acquire for consumption.
- Significance: Widely used macroeconomic indicator of inflation, tool for inflation targeting by governments and central banks, deflators in national accounts, indexing dearness allowance to employees.
- Published by: Central Statistical Office (CSO) on 12th of every month.
- Components: Includes 4 CPI numbers at the national level, namely:
- CPI for Industrial Workers (IW),
- CPI for Agricultural Labourers (AL),
- CPI for Rural Labourers (RL) and
- CPI for Urban Non-Manual Employees (UNME).
- Base Year for CPI: 2012
- Comparison with Wholesale Price Index (WPI): WPI captures the inflation at the wholesale level, and differs with CPI in terms of their weighing patterns.
- Food has a larger weight in CPI while fuel group has greater weight in WPI.
