Retail Inflation For Agricultural & Rural Workers Declines In January

Retail inflation for agricultural and rural workers eased in January 2025, with the Consumer Price Index for Agricultural Labourers (CPI-AL) and Consumer Price Index for Rural Labourers (CPI-RL) standing at 4.61% and 4.73%, respectively, compared to 7.52% and 7.37% in January 2024, according to data from the Ministry of Labour released on Monday.

This decline also marks an improvement from December 2024, when inflation for agricultural labourers was at 5.01% and for rural labourers at 5.05%.

The trend of falling inflation over the past five months has brought relief to these segments, allowing greater purchasing power and improving living standards.

The drop in inflation for farm and rural workers aligns with the overall retail inflation slowdown, which reached a five-month low of 4.31% in January, driven by lower vegetable and pulse prices.

The overall CPI inflation has been on a steady decline since peaking at 6.21% in October, falling to 5.48% in November and 5.22% in December.

Food inflation, now at 6.02% in January, is at its lowest level since August 2024.

Ministry Attributes Inflation Decline To Lower Food & Commodity Prices

A ministry statement noted, “The significant decline in headline inflation and food inflation during the month of January is mainly attributed to a decline in inflation of vegetables, egg, pulses, cereals, education, clothing and health.”

Year-on-year fuel and light inflation stood at (-)1.38% in January, slightly lower than (-)1.33% in December 2024, reflecting a continued decline in fuel prices.

In response to the moderating inflation, RBI Governor Sanjay Malhotra announced a 25-basis point cut in the policy rate, reducing it from 6.5% to 6.25%.

He noted that inflation will likely ease further and align with the central bank’s target.

The monetary policy decision aims to strike a balance between managing inflation and boosting growth in a slowing economy.

The MPC unanimously agreed to maintain a neutral stance, prioritizing inflation control while supporting economic expansion.

This approach allows flexibility in responding to macroeconomic conditions, Malhotra stated.

With retail inflation on a downward trend, the RBI now has more room to adopt a softer monetary policy, facilitating increased credit flow to businesses and consumers to stimulate demand and drive economic growth.

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