Daijiworld Media Network - New Delhi
New Delhi, May 13: India’s retail inflation fell to 3.16% in April, down from 3.34% in March, hitting its lowest level since July 2019, according to data released by the Ministry of Statistics on Tuesday. The drop, driven primarily by easing food prices, is expected to bolster the Reserve Bank of India’s (RBI) soft monetary stance to support economic growth.
This marks the third consecutive month that retail inflation has remained below the RBI’s 4% medium-term target, a level considered conducive for both price stability and growth momentum.
Food inflation, which makes up nearly 50% of the Consumer Price Index (CPI) basket, declined sharply to 1.78% in April from 2.69% in March — a key contributor to the broader softening in headline inflation.
The RBI has noted a positive turnaround in food inflation, citing improved agricultural conditions and promising harvest estimates. “The outlook for food inflation has turned decisively positive,” RBI Governor Sanjay Malhotra said in the latest Monetary Policy Committee (MPC) review. “Uncertainties regarding rabi crops have abated considerably, with record wheat and higher pulse production expected.”
With inflation easing faster than expected, the RBI has revised its CPI inflation forecast for FY 2025-26 down to 4.0%, from its earlier estimate of 4.2%. Governor Malhotra outlined the quarterly projections: Q1 at 3.6%, Q2 at 3.9%, Q3 at 3.8%, and Q4 at 4.4%. He added that the risks to the inflation trajectory are “evenly balanced,” noting that global uncertainties and climate-related supply shocks could still pose upside risks.
A further decline in global crude oil prices has also helped contain input costs, contributing to the positive inflation outlook. Malhotra highlighted that inflation expectations among households have fallen significantly, reinforcing the credibility of the RBI’s policy stance. “The sharp decline in expectations from our latest survey — for both three months and one year ahead — will help anchor inflation outlook,” Malhotra said.
With inflation remaining below target and growth concerns still on the radar, analysts expect the RBI to maintain its accommodative stance, if not consider rate cuts later in the year — particularly if the monsoon remains normal, as forecast.
Overall, April’s inflation data is a sign of resilience in the Indian economy and could give policymakers more room to focus on investment and employment generation, without the immediate concern of overheating prices.