In June 2025, National Statistics Office (NSO), under the Ministry of Statistics and Programme Implementation (MoSPI), released the ‘Consumer Price Index (CPI) for rural, urban and combined for the month of May 2025’. As per the NSO’s data, India’s retail inflation measured by CPI, dropped to a 75-month low (6 years) by 34 basis points (bps), to 2.82% in May 2025, down from 3.16% in April 2025.
- This is the lowest Year-on-Year (Y-o-Y) inflation registered since February 2019 (at 2.57%). This marks the fourth straight month that inflation has stayed below the Reserve Bank of India (RBI) ‘s 4% target .
- This decline in retail inflation is largely driven by a sharp decrease in food inflation, favourable base effects and lower price increases in essential items.
Key Findings:
i.Food Inflation: The data showed that Y-o-Y inflation rate based on All India Consumer Food Price Index (CFPI) for the month of May, 2025 over May, 2024 is 0.99% (Provisional).
- Also, food inflation registered in the month of May 2025(the lowest since October 2021) saw a sharp decline of 79 bps compared to 1.78% in April 2025.
- This decline in food inflation was mainly attributed by drop in vegetable prices (-13.7%); pulses (-8.23%); spices (-2.82%) and meat (0.39%).
- As per the data, rural food and urban food inflation in May 2025 stood at 0.95% and 0.96%, respectively.
ii.Rural Inflation: The headline inflation in rural areas of the country decreased from 2.92% (in April 2025) to 2.59% (Provisional) (in May 2025).
- While, the rural CFPI-based food inflation declined from 1.85% (in April 2025) to 0.95% (in May 2025).
iii.Urban Inflation: In urban India, the headline inflation decreased from 3.36% (in April 2025) to 3.07% (Provisional) in May 2025.
- Similarly, food inflation dropped from 1.64% to 0.96% for the same period of time as for headline inflation.
iv.Increase in Core Inflation: As per NSO’s official data, the core inflation, excluding volatile food and fuel components, has increased marginally from 4.23% in April 2025 to 4.28% in May 2025, the highest since October 2023.
v.States/UTs with highest inflation rate: Among 22 major Indian states/ Union Territories (UTs) having a population of over 5 million, 10 recorded an inflation rate higher than the national average.
- Kerala topped among all Indian states/ UTs with highest Year-on-Year (Y-o-Y) inflation rate of 6.46% in the month of May 2025, followed by Punjab (5.21%)
vi.States with lowest inflation rate (in May 2025): Among 22 major Indian states/ Union Territories (UTs), 12 reported inflation rate lower than the national average (2.82%).
- Telangana registered the lowest inflation rate i.e. 0.55% in May 2025 compared to all 22 major states/UTs; followed by Bihar (1.52%) and Andhra Pradesh (AP) (1.69%).
About Ministry of Statistics and Programme Implementaion (MoSPI):
Minister of State (MoS) (Independent Charge, IC)-Rao Inderjit Singh (Constituency- Gurugram, Haryana)
