New Delhi, June 20 The year-on-year inflation rates based on the all-India consumer price index for agricultural labourers (CPI-AL) and rural labourers (CPI-RL) for May this year declined to 2.84 per cent and 2.97 per cent, respectively, compared to 7 per cent and 7.02 per cent in the same month of the previous year, bringing respite to poor households, figures released by the Ministry of Labour & Employment on Friday showed.
The inflation rate has also come down on a month-to-month basis, as corresponding figures for April 2025 stood at 3.48 per cent for CPI-AL and 3.53 per cent for CPI-RL.
The inflation rate for agricultural and rural labourers has been steadily declining over the last seven months. This comes as a welcome relief for these vulnerable segments that are hit hardest by spiralling prices. It also leaves more money in their hands to buy a wider range of goods, leading to a better lifestyle.
The decline in inflation for farm and rural workers has also come in the backdrop of a fall in the country’s overall inflation based on the Consumer Price Index (CPI) to 2.82 per cent in May this year compared to the same month of the previous year. This is the lowest level of retail inflation since February 2019, according to a statement issued by the Ministry of Statistics on Thursday.
Food Inflation declined to 0.99 per cent during May, which is the lowest since October 2021. This is the seventh month in a row that food inflation has registered a decline as the agricultural output has been on the rise.
The significant decline in inflation during the month is mainly attributed to the decline in inflation of pulses, vegetables, fruits, cereals, household goods & services, sugar, and eggs.
Inflation also declined due to a moderation in fuel prices, with international prices of crude oil coming down during the month.
The RBI has revised its inflation outlook for 2025-26 downwards from the earlier forecast of 4 per cent to 3.7 per cent, Reserve Bank Governor Sanjay Malhotra said during the monetary policy review meeting earlier this month.
CPI inflation for the financial year 2025-26 is now projected at 3.7 per cent, with Q1 at 2.9 per cent, Q2 at 3.4 per cent, Q3 at 3.9 per cent, and Q4 at 4.4 per cent.
The easing of inflation has enabled the RBI to go in for an interest rate cut and a reduction in the cash reserve ratio (CRR)for banks to spur growth in the economy.
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