Inflation eases, relief for farm, rural workers

New Delhi

Inflation for agricultural and rural workers eased significantly in February, bringing much-needed relief to low-income households, according to official data released Monday. The year-on-year inflation rate for agricultural labourers (CPI-AL) dropped to 4.05% from 7.43% in February 2024, while for rural labourers (CPI-RL), it declined to 4.1% from 7.36% in the same period.

The downward trend continued from January, when CPI-AL stood at 4.61% and CPI-RL at 4.73%. The decline has been steady over the past six months, allowing rural workers greater purchasing power and improving living standards.

Overall retail inflation in India also hit a seven-month low of 3.61% in February, down 0.65% from January. This decline is attributed to falling food prices, particularly in vegetables, eggs, meat, fish, pulses, and dairy products. Fuel prices also dropped, leading to a recorded inflation rate of -1.33% in February, further easing household expenses.

With inflation now below the Reserve Bank of India's (RBI) 4% target, there is greater scope for interest rate cuts to stimulate economic growth and job creation. Last month, RBI Governor Sanjay Malhotra announced a 25-basis-point cut in the policy rate, reducing it from 6.5% to 6.25%.

Malhotra emphasized that inflation is expected to moderate further, aligning with the RBI’s 4% goal. The central bank's monetary policy stance remains neutral, balancing inflation control with economic growth amid global uncertainties.