Synopsis
Data from the Ministry of Labour reveals that the CPI inflation for Agricultural and Rural Labourers has seen a significant decrease in January 2025, providing much-needed relief to these vulnerable groups amidst ongoing economic challenges.Key Takeaways
- CPI inflation rates for Agricultural Labourers fell to 4.61%.
- Rural Labourers saw a decrease to 4.73%.
- Inflation has been dropping steadily over the past five months.
- Retail inflation reached a five-month low of 4.31%.
- RBI cut the policy rate to 6.25% to support economic growth.
New Delhi, Feb 24 (NationPress) The CPI inflation rates for Agricultural Labourers (CPI-AL) and Rural Labourers (CPI-RL) for January this year fell to 4.61% and 4.73%, respectively, down from 7.52% and 7.37% in January 2024, as per data released by the Ministry of Labour on Monday.
This decline in inflation was also evident when compared to December 2024, where the CPI inflation for agricultural workers was reported at 5.01% and 5.05% for rural labourers.
Over the past five months, the inflation rate for agricultural and rural workers has been consistently decreasing. This trend is a positive development for these vulnerable groups who are most affected by rising prices, enabling them to allocate more funds towards a broader array of products, thereby enhancing their quality of life.
The drop in inflation for these workers coincides with a reduction in the nation's overall retail inflation, which reached a 5-month low of 4.31% in January, attributed to lower prices of vegetables and pulses during that month.
This trend marks a steady decline from a 14-month peak of 6.21% in October. CPI inflation decreased to 5.48% in November and 5.22% in December.
Food inflation stood at 6.02% in January 2025, the lowest since August 2024.
The Ministry has noted that the substantial decrease in both overall and food inflation in January can be largely attributed to reductions in prices of vegetables, eggs, pulses, cereals, education, clothing, and health.
The year-on-year inflation rate for fuel & light in January is (-)1.38%, slightly up from (-)1.33% in December 2024, indicating a continued drop in fuel prices.
RBI Governor Sanjay Malhotra recently announced a 25 basis point cut in the policy rate, lowering it from 6.5% to 6.25%, aiming to stimulate growth amid global uncertainties.
He emphasized that inflation has decreased and is projected to continue moderating, aligning with the RBI’s target.
The monetary policy decision seeks to strike a balance between managing inflation and boosting growth in a slowing economy.
The MPC has agreed to maintain a neutral monetary policy stance, emphasizing inflation control while fostering growth. This allows for flexibility in responding to the macroeconomic landscape, according to Malhotra.
With retail inflation on a downward trajectory, the RBI will have increased flexibility to implement a softer monetary policy, encouraging credit flow to businesses and consumers to stimulate overall demand and drive economic growth.
