The very good news is for India’s common people. India’s core inflation has dropped for the third month in a row, hitting 4.31 percent year-on-year in January. This gives the central bank more leeway for monetary easing after it recently cut rates for the first time in almost five years.
Government data shows that the All India Consumer Price Index (CPI) for January 2025 stands at 4.31 percent compared to January 2024. The headline inflation for January 2025 is down by 91 basis points from December 2024, marking the lowest year-on-year inflation since August 2024. However, inflation rates in several states are higher than the national average, with Kerala (6.76), Odisha (6.05), and Chhattisgarh (5.85) leading the pack.
Looking at food inflation, the year-on-year rate based on the All India Consumer Food Price Index (CFPI) for January 2025 is 6.02 percent compared to January 2024. For rural and urban areas, the inflation rates are 6.31 percent and 5.53 percent, respectively. Over the past 13 months, the all-India inflation rates for CPI (general) and CFPI are outlined below. Food inflation has dropped significantly by 237 basis points in January 2025 compared to December 2024, marking the lowest level since August 2024.
When it comes to rural inflation, there’s been a notable decrease in both headline and food inflation in January 2025, with rates at 4.64 percent compared to 5.76 percent in December 2024. The CFPI-based food inflation in rural areas was recorded at 6.31 percent in January 2025, down from 8.65 percent in December 2024. Urban inflation also saw a sharp drop from 4.58 percent in December 2024 to 3.87 percent in January 2025, with food inflation decreasing from 7.9 percent in December 2024 to 5.53 percent in January 2025.
In January 2025, the housing inflation rate compared to last year stands at 2.76%, which is a slight increase from December 2024’s rate of 2.71%. The housing index is only available for urban areas. For education, the inflation rate in January 2025 is 3.83%, down from 3.95% in December 2024. In the health sector, the inflation rate for January 2025 is 3.97%, a decrease from 4.05% the previous month, covering both rural and urban areas. Transport and communication inflation is at 2.76%, up from 2.64% in December 2024.
When it comes to the most expensive items, the top five with the highest inflation rates in January 2025 are Coconut Oil (54.20%), Potato (49.61%), Coconut (38.71%), Garlic (30.65%), and Peas (30.17%).
On the flip side, the items with the lowest inflation rates this January include Cumin (-32.25%), Ginger (-30.92%), Dried Chillies (-11.27%), Brinjal (-9.94%), and LPG (excluding vehicles) (-9.29%).