SDG 8: Decent Work and Economic Growth | SDG 2: Zero Hunger
Institutions: Ministry of Statistics and Programme Implementation (MoSPI) | National Statistics Office (NSO)
The All-India Consumer Price Index (CPI) recorded a year-on-year inflation rate of 0.25% for October 2025. This figure, a significant decrease of 119 basis points from September 2025’s 1.44%, marks the lowest year-on-year inflation of the current CPI series. The primary driver was a sharp decline in food prices, with the Consumer Food Price Index (CFPI) registering deflation of -5.02% for the month.
The decline in both headline and food inflation is mainly attributed to the full month’s impact of a reduction in GST, a favorable base effect, and a broad drop in inflation across several key categories.
Key sectoral contributions to the drop included significant deflation in Vegetables (-27.57%) and Pulses and products (-16.15%), alongside easing inflation in Oils and fats (11.17%), Egg (1.33%), and Transport and Communication (0.94%). Rural inflation was recorded at -0.25%, and Urban inflation showed sharp divergence at 0.88%.
The dramatic fall in inflation, driven significantly by the “impact of reduction in GST”, demonstrates the government’s effective use of supply-side fiscal policy to provide immediate price relief to consumers. The broad-based deflation, particularly in food, creates substantial monetary policy space for the Reserve Bank of India (RBI) and is a strong indicator of both improving supply chains and easing price pressures on essential commodities, directly impacting household budgets.
What is the “favorable base effect” mentioned in the report? → The favorable base effect is a statistical phenomenon where the current inflation rate appears lower because prices were unusually high during the corresponding period of the previous year (October 2024). The combined CPI inflation rate for October 2024 was 6.21%, and CFPI inflation was 10.87%, creating a high base that makes the current modest price levels appear much lower in year-on-year calculation.
Follow the full report here: Consumer Price Index Numbers on Base 2012=100 for Rural, Urban and Combined for the Month of October, 2025