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Monetary policy and inflation

How the Reserve Bank of India sets interest rates to keep inflation near its target, and how inflation is measured.

Showing 1 of 2 articles, those that changed from 1 to 30 September 2026.Show all

Consumer and wholesale price inflation

Prelims

The Consumer Price Index (CPI) measures inflation in retail prices, and the Wholesale Price Index (WPI) measures prices at the wholesale stage.

The National Statistics Office under the Ministry of Statistics and Programme Implementation releases the CPI every month, on a base of 2024 = 100 since February 2026.
Under Section 45ZA of the Reserve Bank of India Act, 1934, the target is 4 per cent CPI inflation within a band of 2 to 6 per cent.
Food and beverages carry the largest weight in the CPI basket, about 46 per cent.
The WPI is on a 2022-23 base and is due to give way to a Producer Price Index.

Show history (3 other updates)

12 Aug 2026Briefnewly addedCPI inflation for July 2026 was 4.45 per cent, a 19 month high and above the 4 per cent target. The Hindu, 12 Aug 2026: Retail inflation hits 19-month high of 4.45% in July 2026 as food, fuel prices rise (opens in a new tab) · Ministry of Statistics and Programme Implementation, 12 Aug 2026: CPI press release for July 2026 (opens in a new tab)
13 Jul 2026Briefnewly addedCPI inflation for June 2026 was 4.38 per cent, the first time the new series has crossed the 4 per cent target, though it stayed within the band. Ministry of Statistics and Programme Implementation, 13 Jul 2026: CPI press release for June 2026 (opens in a new tab)
12 Jun 2026Briefnewly addedCPI inflation for May 2026 was 3.93 per cent, the highest in about 16 months but still below the 4 per cent target. Wholesale inflation on the new series was 9.68 per cent in May against 3.93 per cent for consumer prices, a gap that shows producers' costs not yet passed to retail. PIB, 12 Jun 2026: CPI press release for May 2026 (opens in a new tab) · The Hindu, 15 Jun 2026: Wholesale inflation jumps to 9.7% in May 2026 on surging fuel prices (opens in a new tab)

The Producer Price Index and the new statistical series · on Growth, national accounts and their revision
An index measures change against a base year.
The swap window, reserves and liquidity · on Balance of payments, the rupee and reserves
In June the Reserve Bank opened a window under which banks could swap dollars raised from non residents for rupees, at a subsidised cost (see the June lead).