Consumer Price Index (CPI) of India

Food inflation eases retail prices to 3.31% YoY in October.

Published monthly by the Ministry of Statistics and Programme Implementation (MOSPI). Updated until October 2018. (Published on November 12th, 2018) 
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), slowed down to a thirteen-month low of 3.31% year-on-year (YoY) growth in Oct'18 after rising to near 4.79% in the first quarter of FY19. The CPI inflation fell from 3.7% YoY (revised Sep'18 figure) to 3.31% YoY on account of subdued food inflation.

The food inflation as measured by consumer food price index (CFPI) contracted to a negative 0.9% YoY, lowest since June last year. Prices of pulses, sugar and vegetables were lower than last year prices, keeping retail inflation below the Central bank's target. This shows that the government procurements are yet to pick up even after the harvest season has begun in Oct.

In addition, clothing & footwear and housing both recorded a marginal fall in inflation to 3.6% YoY and 6.6% YoY, respectively.

However, fuel inflation, unlike food, has grown at a rate of 8.5% YoY since Aug'18. Despite a majority of the groups recording a decline in inflation in Oct'18, looking at underlying inflation, as depicted by core CPI (CPI excl. food and fuel) there was slight hardening of core inflation to 6.1% YoY, driven by miscellaneous items which jumped to 6.7% YoY in Oct'18 after clocking just over 3.5% YoY growth in Oct'17. This certainly poses some concerns on core inflation. Core inflation still remains elevated and thus makes a case for inflation being a concern.

In our view the probability of monetary tightening in December is unlikely, given the fact that RBI targets on maintaining the headline inflation, we are seeing that the current level of retail inflation continues to remain below the Monetary Policy Committee's (MPC) mid-term target of 4% within a band of +/-2%, the MPC could choose to maintain a status quo on interest rates. Along with this, the cooling of oil prices and currency stabilization since the beginning of Oct'18 has helped retail inflation. The RBI should, on the other hand, take measures to ensure financial stability in the economy, as the issue of defaults by IL&FS can have serious implications on the availability of liquidity in the system.

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: December 12th, 2018