The ministry notes that agricultural activity continues to create a favourable environment for the inflation outlook
Highlighting that the Monetary Policy Committee (MPC) has revised its inflation projection for 2025–26 to 2.6 per cent, the Finance Ministry has stated that this reflects confidence that inflation will remain well-anchored going ahead, contingent on normal weather patterns and the absence of supply-side disruptions.
In its monthly economic review for October 2025, the department of economic affairs highlighted that the inflation during April-October 2025 stood at 4.8 per cent, reflecting a consistent easing of price pressures throughout the year. Retail inflation reached an all-time low in the current series, dropping to 0.25 per cent in October 2025, down from 1.44 per cent in September 2025.
The decline can largely be attributed to the complete impact of reduced GST rates, a favourable base effect, and significant falls in food inflation, the ministry added. Deflationary pressures continued in food prices, which decreased by 5.0 per cent, the steepest decline in over a decade.
“This was driven by price corrections in vegetables, particularly tomatoes, onions, and potatoes, as well as a continued easing in the prices of pulses. Meanwhile, core inflation held steady at 4.3 per cent, indicating stable demand conditions in the economy,” the report pointed out.
Agricultural activity continues to create a favourable environment for the inflation outlook. The Rabi sowing season has commenced, with the total area sown reaching 22.97 million hectare as of 21 November 2025, representing a 14.8 per cent increase compared to the same period in the previous year.
The ministry mentioned that areas sown for major Rabi crops, including wheat and gram, have risen by 19.9 per cent and 8.9 per cent, respectively, supported by adequate soil moisture and reservoir levels that remain significantly above the long-term average. Furthermore, the Kharif marketing season for 2025-26 is proceeding smoothly, it said.
