Daijiworld Media Network - New Delhi

New Delhi, Dec 13: India’s headline retail inflation, measured by the Consumer Price Index (CPI), rose marginally to 0.71 per cent in November from a record low of 0.25 per cent in October, data released by the Ministry of Statistics and Programme Implementation (MoSP) on Friday showed. The uptick was largely attributed to an unfavourable base effect, particularly in food items.

Despite this, food prices continued to remain in deflation for the sixth consecutive month, declining 3.91 per cent year-on-year in November, compared to a sharper fall of 5.02 per cent in October. Economists said the easing pace of food deflation led to the slight increase in overall inflation.

“The marginal uptick in retail inflation was on account of decline in the food deflation,” said Paras Jasrai, Economist at India Ratings & Research. He noted that vegetables and pulses continued to witness strong deflation, while cereals inflation touched a 50-month low of 0.1 per cent, supported by a favourable kharif sowing season.

At 0.71 per cent, headline inflation remained well below the Reserve Bank of India’s medium-term target of 4 per cent for the 10th straight month and stayed under the lower bound of the RBI’s tolerance band of 2–6 per cent for the third consecutive month.

The CPI data comes shortly after the RBI’s Monetary Policy Committee cut the repo rate by 25 basis points to 5.25 per cent last week. RBI Governor Sanjay Malhotra said inflation is expected to rise gradually in the coming quarters, though underlying price pressures remain low, with rising precious metal prices contributing significantly to headline inflation.

Among food items, vegetable prices were down 22.2 per cent year-on-year, pulses declined 15.86 per cent, and spices fell 2.89 per cent. On a month-on-month basis, however, vegetables rose 2.6 per cent and pulses edged up 0.1 per cent. Eggs recorded the sharpest monthly increase at 5.2 per cent.

Non-food categories showed muted price pressures, with clothing and footwear rising 0.1 per cent month-on-month, while housing and fuel increased 0.2 per cent each. The ‘miscellaneous’ category saw a 0.2 per cent rise, driven mainly by higher personal care costs linked to soaring gold and silver prices.

Gold and silver inflation touched record highs of 58.32 per cent and 65.52 per cent respectively in November, exerting upward pressure on core inflation, which remained steady at 4.4 per cent.

With headline inflation subdued and GDP growth expected to moderate, economists believe there is a reasonable possibility of another rate cut when the MPC meets next in February. The central bank has already reduced the repo rate by 125 basis points so far in 2025.