Government and RBI have taken key monetary and fiscal measures to control inflation and mitigate its impact on common citizen
Government and RBI have taken key monetary and fiscal measures to control inflation and mitigate its impact on common citizen
The average inflation rate based on Consumer Price Index (CPI) and Wholesale Price Index (WPI) for the last three quarters is given in the table below:
Quarter
Inflation rate based on CPI (%)
Inflation rate based on WPI (%)
Q3:2024-25
5.6
2.5
Q4:2024-25
3.7
2.4
Ql:2025-26
2.7
0.4
Source: MoSPI and Office of Economic Adviser (DPIIT)
This was stated by Union Minister of State for Finance Shri Pankaj Chaudhary in a written reply to a question in Rajya Sabha today.
Under the provisions of the RBI Act, 1934, the Minister stated, the Reserve Bank of India (RBI) follows a policy of flexible inflation targeting as its primary monetary policy framework, whereby RBI targets Consumer Price Index (CPI) inflation (headline inflation) to be maintained at 4% with a tolerance band of ±2 percentage points (i.e., the target range is 2% to 6%). Over the past three quarters, the CPI inflation rate has been within the RBI’s tolerance band of 4% ±2%. WPI is not a specifically targeted inflation rate for RBI.
The Minister stated that the Government of India has undertaken a series of administrative measures, including fiscal and trade policy, to control inflation and mitigate its impact on the common citizen. These include, inter alia:
Giving more details, the Minister further stated that complementing these efforts, the Reserve Bank of India‘s Monetary Policy Committee raised the repo rate by 250 basis points cumulatively (4% to 6.5%) between May 2022 and February 2023, and thereafter maintained it at 6.5% through January 2025. Consequently, the average year-on-year retail inflation, as measured by the CPI, fell from 5.4 per cent in 2023-24 to 4.6 per cent in 2024-25, the lowest in six years. As per the recent data, retail inflation dropped further to 2.1 per cent in June 2025. Consequent to a broad-based decline in inflation and to promote growth, RBI has brought in 100 basis point cut in policy (repo) rate since February 2025. These coordinated actions are aimed at balancing inflation control with sustained economic growth.