Lower Rural Inflation May Ease Pressure on Policymakers Ahead of Kharif Season
According to data released, the CPI-AL decreased by 2 points to 1305, while the CPI-RL saw a 1-point dip, settling at 1319. Both indices are based on the 1986-87=100 baseline.
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Rural India experienced a moderation in inflationary pressures during May 2025, as the All-India Consumer Price Index (CPI) for Agricultural Labourers (CPI-AL) and Rural Labourers (CPI-RL) both registered a slight decline. This comes as a welcome relief compared to the significantly higher inflation rates observed in the same period last year.
According to data released, the CPI-AL decreased by 2 points to 1305, while the CPI-RL saw a 1-point dip, settling at 1319. Both indices are based on the 1986-87 (=100) baseline.
The year-on-year inflation rates for May 2025 stood at 2.84% for CPI-AL and 2.97% for CPI-RL. This represents a substantial drop from May 2024, when the inflation rates were a much higher 7.00% and 7.02% respectively. Compared to the previous month, April 2025, where CPI-AL was at 3.48% and CPI-RL at 3.53%, the current figures indicate a continued downward trend in rural inflation.
A closer look at the group-wise indices reveals some key movements:
Food: The food index, a significant component of both CPI-AL and CPI-RL, witnessed a decline. For agricultural labourers, the food index fell from 1233 in April to 1228 in May, and for rural labourers, it decreased from 1240 to 1234. This suggests a potential easing of food prices in rural areas.
Pan, Supari, etc.: This category saw a marginal increase, with the index for agricultural labourers rising from 2143 to 2146 and for rural labourers from 2152 to 2156.
Fuel & Light: Both indices for fuel and light registered a slight uptick, with agricultural labourers seeing an increase from 1404 to 1408, and rural labourers from 1393 to 1397.
Clothing, Bedding & Footwear: This group also experienced a modest rise. The index for agricultural labourers moved from 1344 to 1351, and for rural labourers, it increased from 1412 to 1418.
Miscellaneous: The miscellaneous category showed an increase for both groups, from 1405 to 1415, indicating potentially higher costs for various other goods and services.
The May 2025 data paints a picture of controlled inflation in rural India, a positive development for agricultural and rural labourers who are often more susceptible to price fluctuations in essential commodities. The significant reduction in year-on-year inflation rates suggests an improved economic environment compared to the previous year.
