Consumer Price Index (CPI) of India

CPI inflation print at a 6-month high in April led by rise in food prices.

Published monthly by the Ministry of Statistics and Programme Implementation (MOSPI). Updated until April 2019. (Published on May 13th, 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) inflation rose to 6-month high of 2.92% year-on-year (YoY) in April 2019 from 2.86% in March 2019. The pickup in the inflation print in the first month of FY20 is on account of the 9-month high rise in food prices and 4-month high pickup in fuel prices. Despite the marginal increase in retail prices, the level of retail inflation remains below RBI's inflation target of 4% (+/-2). Since RBI tracks CPI primarily to formulate its monetary policy, there is room for its MPC to cut rates further. In 2019, the policy rates have so far been cut by 50 basis points. We believe, the RBI should keep a watch on the monsoons, crude oil price movements and announcements by the new government before deciding to go for another rate cut in the next policy meet.

Food inflation (as measured by consumer food price index (CFPI)) rose to 1.3% YoY compared to 0.66% YoY growth in March 2019. This rise in food prices from unusually low levels to as much as 1.3% YoY can be one of the main reasons for acceleration in the overall retail inflation. The prices of vegetables rose by 2.86% YoY, highest since July 2018, while prices of pulses remain as low as -0.8% YoY in April since December 2016.

By sub-groups, housing inflation stood at a 22-month low of 4.7% YoY in April 2019, mainly on account of receding impact of HRA implementation under 7th Pay Commission and a high base effect. In addition, inflation in the fuel and lighting segment rose to 2.5% YoY in April 2019, highest since January 2019. Prices of domestic fuel and lighting rose mainly due to the uptick in global crude oil prices. 

The core inflation (retail inflation excl. food and fuel) showed an easing of price pressures as it stood at 4.5% YoY in April 2019. This is a significant moderation as it has been the lowest in the last 21-months, thus reflecting the current subdued demand conditions in the economy.

We believe, going forward, direction of retail price levels in the coming months will depend upon the upcoming monsoons and how well India copes with the significant risks that can emerge in determining oil prices. India is seeking terms with other middle-east countries for oil imports to avert sharp rise in its domestic fuel prices admist rising tension over blocking of oil tanker movements through the strait of Hormuz (a possible retaliatory measure by Iran).

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: June 13th, 2019