Consumer Price Index (CPI) of India

CPI hits an 18-month low of 2.19% YoY in Dec'18 on softening of food prices.

Published monthly by the Ministry of Statistics and Programme Implementation (MOSPI). Updated until December 2018. (Published on January 14th, 2019) 
Note: The seasonally adjusted series has been obtained using the Census X-13 procedure with the X-11 method of seasonal adjustment.
Note: The core CPI excludes food and fuel group from the headline CPI. The effective core CPI excludes pan tobacco & intoxicants and housing from core CPI.
Note: CPI-Services includes health, education, personal care, recreation, and amusement services. CPI-Goods is CPI excl. CPI services.

Recent Data Trend 

India's Consumer Price Index (CPI), which has been falling since June this year, had reached a new low of 2.19% YoY in Dec'18. The headline inflation stood at 2.33% YoY in Nov'18 and 5.21% YoY in Dec'17. The 18-month low inflation came close to market expectation of 2.2% YoY (Bloomberg poll). The softening of the headline inflation continues to be primarily driven by deflation in food prices.

The food inflation as measured by Consumer Food Price Index (CFPI), contracted for the third consecutive month by 2.5% YoY in Dec'18, against (-)2.6% YoY in Nov'18. Prices of pulses, vegetables, and sugar had continued to fall, providing no relief to existing distress in the rural economy. In addition, the recent correction in global crude oil prices in the past three months too had kept inflation in check.

While low inflation is a cause for celebration for urban consumers, inflation this low and largely on account of falling food prices is a matter of concern for a country like India. As a large percentage of the population is dependent on farming, lower food prices mean a lower rural income. And a lower rural purchasing power could affect aggregate demand and growth which had already moderated in Q2 of FY19.

The core inflation (excluding food, fuel and light items) remained flat, showing no significant decline, at 5.7% YoY. The sharp fall in prices of petrol and diesel in December had been offset by high inflation in health and education sub-groups.

The consumer price index for Q3 FY19 stood at 2.6% YoY, as against 3.9% YoY in the last quarter.

With a persistently falling headline inflation and a slowdown in manufacturing activities (IIP at a 17-month low of 0.5% YoY), an accommodative monetary policy along with a change in stance are likely on cards in February. The RBI has also trimmed the inflation forecast to 2.7%-3.2% YoY for H2FY19 compared to an earlier projection of 3.9-4.5% YoY. Moreover, BJP-the current ruling government-lost the past assembly elections in three states due to rising rural distress, as inflation is too low to support rural income. With Lok Sabha election due this year, this is a wake-up call for the government to address the inflation issue and in turn rural distress immediately.

Brief Overview

Consumer Price Index in India is published monthly by the Central Statistical Organization (CSO). Consumer Price Indices (CPI) measure changes over time in the general level of prices of goods and services that households acquire for consumption. CPI is a macroeconomic indicator of inflation and used as a tool by central banks for inflation targeting and monitoring price stability, and as deflators in the national accounts. CPI is also used for indexing dearness allowance to employees for the increase in prices.

The data we present above is in the base year 2012. The Field Operations Division of NSSO, the specified State/UT Directorates of Economics and Statistics and 1181 selected villages of the Department of Posts collect monthly price data from 1114 markets in 310 chosen towns.

For more information, please visit the official government website.

CPI- Sub-groups

CPI- Quarterly

Note: The seasonally adjusted series has been obtained using the Census X-13 procedure with the X-11 method of seasonal adjustment

CPI- Industrial Workers

CPI- Annual

Next Release Date: February 12th, 2019