October 16 2017

Consumer Price Index (CPI) of India

In September 2017, the retail inflation remained unchanged at 3.28% YoY from the previous month.

Published monthly by the Ministry of Statistics and Programme Implementation (MOSPI). Updated till the month of September 2017. (Published on October 12th, 2017)

Recent Data Trend 

India's consumer price index (CPI) inflation for September 2017 was 3.28% YoY, lower than Reuters' poll expectation of 3.60% YoY. Inflation remained unchanged from the previous month as government revised down its August figure of 3.36% to 3.28% YoY. Additionally, the rural index recorded a slight fall of 0.7% YoY, whereas the urban areas witnessed a 0.9% YoY rise in inflation.

The Consumer Food Price Index (CFPI), a gauge for food inflation, softened to 1.1% YoY in September, in contrast to prior expectations of food (mainly vegetables) prices' to edge higher. The decline was mainly led by vegetables which fell by 2% YoY, following a 6.2% rise in the previous month. Deflation in pulses continued for the tenth consecutive month. On a whole, the downside risks pointed by the RBI, i.e, adequate food stocks and effective supply management may have actively played a role in keeping the food inflation lower than expected and thereby keeping the headline inflation stagnant.

The primary contributors to the September reading were fuel group and housing inflation. Both saw an uptick on account of rising global crude prices and HRA (housing rent allowance) effect. Core inflation (excl food and fuel) also rose, albeit marginally, to 4.5% on a YoY basis.

The result for September is in contrast to RBI's expectations as it raised the inflation forecasts in the range of 4.2-4.6 percent in the second half of 2017. The fall in CPI, despite the unwinding of favorable base effects, also reflects weaknesses in aggregate demand. The growth slowdown coupled with subdued investment activity continues to be a serious concern for the RBI. With the core inflation in the medium-term target of RBI (4% +/- 2%), it is likely to keep the repo rate unchanged in the upcoming December review. 

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 the purpose of consumption. CPI is widely used as a macroeconomic indicator of inflation, as a tool by governments and central banks for inflation targeting and for 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 on the base year 2012. Monthly price data are collected from 1114 markets in 310 selected towns by the Field Operations Division of NSSO and the specified State/UT Directorates of Economics and Statistics and from 1181 selected villages by the Department of Posts.  The prices are being collected through Web Portals.  Web portal for rural prices was developed by NIC and for urban prices by the Computer Centre in MoSPI.

For more information visit the official government website.

Consumer Price Inflation, Sub-groups

Next Release Date: November 13th, 2017