New Delhi, Oct 14 India's annual rate of inflation based on the Wholesale Price Index (WPI) eased to 0.13 per cent in September from 0.52 per cent in August , according to figures released by the Ministry of Commerce and Industry on Tuesday.
The prices of food items declined by (-)1.38 per cent during the month due to higher crop yields and adequate buffer stocks of wheat and rice. The prices of fuels such as petrol, diesel and natural gas also continued to decline during September with fuel inflation staying in the negative zone at -2.58 per cent, the figures showed.
The month over month change in WPI for the month of September stood at (-) 0.19 per cent as compared to August.
However, the year-on-year inflation in September, compared to the same month of the previous year, stayed in the positive zone primarily due to increase in prices of manufactured goods, non-food articles, other transport equipment and textiles,” the official statement said.
Meanwhile, the country's inflation rate based on the consumer price index (CPI) has declined to an over eight-year low of 1.54 per cent in September this year, compared to the same month of the previous year, as prices of food items and fuels turned cheaper during the month, according to figures released by the Ministry of Statistics on Monday.
This is the lowest year-on-year inflation after June, 2017 and is also lower than the inflation rate of 2.05 per cent for August.
Food inflation continued in the negative zone for the fourth consecutive month and was recorded at - 2.28 per cent during September, the figures showed.
"The decline in headline inflation and food inflation during September is mainly attributed to a favourable base effect and the decline in inflation of vegetables, edible oils, fruits, pulses, cereals and egg. Besides, fuels also turned cheaper during the month," the official statement said.
The inflation outlook for 2025-26 has become more benign due to large favourable base effects combined with the good southwest monsoon, healthy kharif sowing, adequate reservoir levels and comfortable buffer stocks of foodgrains. The GST rate cuts, which kicked in on Sept 22, are bringing down prices across goods which will result in reducing inflation further in the coming months.
The decline in the inflation rate gives the RBI more headroom to continue with a soft money policy by cutting interest rates and injecting more money into the economy to spur growth.
The RBI's monetary policy committee (MPC) on October 1 slashed its forecast for India's inflation rate for the financial year 2025-26 to 2.6 per cent from 3.1 per cent in August primarily on account of the GST rate cuts and benign food prices.
RBI Governor Sanjay Malhotra said, "The recently implemented GST rate rationalisation would lead to a reduction in prices of several items in the CPI basket. Overall, the inflation outcome is likely to be softer than what was projected in the August monetary policy committee resolution, primarily on account of the GST rate cuts and benign food prices."
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