Inflation

Inflation is the rate at which prices rise. India’s headline measure is the Consumer Price Index (CPI), published monthly by the National Statistics Office. Since February 2026 it has used a new series with base year 2024=100, a basket of 358 items and weights from the 2023-24 household consumption survey.

The Reserve Bank of India’s target is 4% CPI inflation, with a band of 2% to 6%. The government set that target for April 2026 to March 2031.

Where things stand

CPI inflation was 4.82% in August 2026 (provisional), up from 4.45% in July and 2.74% in January. It has risen every month this year. Food inflation was 5.95%, and rural inflation (5.23%) is running ahead of urban (4.31%).

The RBI says food and fuel drove the rise, and that core inflation rose to 4.2%. It points to the West Asia conflict and sharp volatility in crude oil prices, a deficient south-west monsoon and strong El Niño conditions. On 7 October it raised the repo rate to 5.50% and projected inflation of 6.0% in October-December, at the top of its band.

Key numbers

• 4.82%CPI inflation, August 2026 (provisional)
• 5.95%food inflation, August 2026
• 5.2%RBI projection for 2026-27
• 4%inflation target (band 2% to 6%)

Key dates

1. 12 Feb 2026New CPI series (base 2024) launched with January data
2. 27 Mar 2026Excise duty on petrol and diesel cut; state-run retailers keep pump prices unchanged
3. 14 Sep 2026August CPI: 4.82%, seventh straight rise
4. 7 Oct 2026RBI raises repo rate to 5.50%, citing inflation risks
5. 12 Oct 2026September CPI due
6. 2-4 Dec 2026Next RBI policy meeting

Key questions

Why is inflation rising? MoSPI’s data shows food inflation (5.95% in August) running above the headline rate. The RBI also cites fuel, high energy and commodity prices linked to the West Asia conflict, and weather risks to crops.

Is 4.82% high? It is above the 4% target but inside the 2% to 6% band. The RBI expects it to reach 6.0% in October-December.

Can I compare it with older figures? Not directly. The 2024-base series has a different basket and weights from the old 2012 series, which last reported 1.33% for December 2025.

What is the RBI doing about it? It raised the repo rate by 25 basis points on 7 October, moved to a stance of “calibrated tightening” and said rate cuts are off the table in the near term.