India’s annual rate of inflation based on the Wholesale Price Index (WPI) eased to 0.13 per cent in September, down from 0.52 per cent in August, according to data released by the Ministry of Commerce and Industry on Tuesday.
The decline was driven largely by falling food and fuel prices. Food prices dropped by 1.38 per cent, supported by higher crop yields and adequate buffer stocks of wheat and rice. Fuel inflation remained in the negative zone at 2.58 per cent, with petrol, diesel, and natural gas becoming cheaper during the month. The month-on-month change in WPI for September stood at minus 0.19 per cent compared to August.
Despite the overall slowdown, year-on-year inflation remained in the positive zone, primarily due to rising prices of manufactured goods, non-food articles, textiles, and other transport equipment, the Ministry noted.
Meanwhile, India’s Consumer Price Index (CPI)-based inflation fell to 1.54 per cent in September, marking the lowest level since June 2017 and a decline from August’s 2.05 per cent. Food inflation continued in the negative territory for the fourth consecutive month at 2.28 per cent. The moderation in prices was attributed to favorable base effects and declines in vegetables, edible oils, fruits, pulses, cereals, eggs, and fuels.
The inflation outlook for 2025-26 is expected to remain benign, aided by a good southwest monsoon, healthy kharif sowing, sufficient reservoir levels, and comfortable buffer stocks of foodgrains. Additionally, the GST rate cuts implemented on September 22 are likely to lower prices across various goods, contributing to further easing of inflation in the coming months.
The moderation in inflation gives the Reserve Bank of India (RBI) more flexibility to maintain a soft monetary policy to support economic growth. The RBI’s Monetary Policy Committee (MPC) had, on October 1, revised its forecast for India’s inflation in 2025-26 to 2.6 per cent from 3.1 per cent in August, citing GST rate rationalisation and benign food prices.
RBI Governor Sanjay Malhotra noted that the GST rate cuts would reduce prices of several items in the CPI basket, resulting in a softer inflation outcome than previously projected.
–IANS
