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India is preparing to rejig methodology for computing CPI and revamp monetary policy mandate for targeting retail inflation in 2026 after a year of benign price situation due to subdued food cost and GST reduction. Consumer Price Index (CPI) based retail inflation remained in the Reserve Bank's comfort zone (2-6 per cent) and is likely to stay that way in the next year also, keeping open the possibility of at least one more reduction in rates by the central bank in the coming months. Besides cooling food prices, the decision of the government to reduce GST rates on about 400 items in September helped in further improving the price situation in the country. The wholesale price index (WPI), too, showed clear signs of easing of inflationary pressures through 2025. Early months recorded positive but declining WPI inflation, reflecting softening price pressures especially in food and fuel categories. By June, WPI entered deflation and the downward trend continued with negative prints in
Retail inflation for farm and rural workers eased slightly to 4.61 per cent and 4.73 per cent, respectively, in January from 5.01 per cent and 5.05 per cent in December 2024, showed the government data released on Monday. The All-India Consumer Price Index for Agricultural Labourers (CPI-AL) and Rural Labourers (CPI-RL) decreased by 4 points and 3 points, respectively, for the month of January 2025, reaching 1,316 and 1,328 points, the labour ministry said in a statement. According to the statement, the CPI-AL and CPI-RL stood at 1,320 points and 1,331 points, respectively in December 2024. "The year-on-year inflation rates based on CPI-AL and CPI-RL for the month of January, 2025 were recorded at 4.61 per cent and 4.73 per cent, respectively, compared to 7.52 per cent and 7.37 per cent in January, 2024. The corresponding figures for December, 2024 were 5.01 per cent for CPI-AL and 5.05 per cent for CPI-RL," it stated. The food index for CPI-AL decreased from 1,262 points in Decemb
RBI Monetary Policy Committee member Nagesh Kumar has suggested that there should be two inflation rates - one including food prices and the other without food prices - so that relevant rates could be taken into account for policy making. Chief Economic Advisor V Anantha Nageswaran in the Economic Survey 2023-24 had pitched for excluding food inflation from the rate setting calls, saying that the monetary policy has no bearing on the prices of food items, which are dictated by supply side pressures. "I think there is a healthy debate on what should be the target, whether overall headline inflation rate or inflation rate excluding the food products, which are, you know, very seriously affected by seasonal demand, supply mismatch," Kumar told PTI while responding to a question on suggestions made in the Economic Survey for excluding food inflation while setting benchmark interest rates. The weightage of food in the overall consumer price inflation, which stands at 46 per cent, was don