Good News for Your Wallet: Everyday Prices in India Set to Drop Soon
Hey folks, if you’ve been feeling the pinch from rising costs, there’s some relief on the way. A fresh report from Bank of Baroda (BoB) suggests that prices of daily essentials like groceries and services could ease up in the coming days, thanks to the government’s recent cuts in indirect taxes. These changes are starting to make a real difference for consumers across India.
The report predicts that overall inflation, measured by the Consumer Price Index (CPI), will likely hover around 3.1% for the financial year 2025-26. And get this—there’s even a chance it could dip lower, which means more savings for you on everything from veggies to fuel.
"We may see episodes of disinflation soon as the government’s lower indirect tax rates get passed on to actual prices," the BoB report notes. "CPI in FY26 should settle at 3.1%, with risks leaning towards even softer numbers." That’s a big win for keeping India’s inflation under control.
August brought some welcome cooling in consumer inflation, dropping to 2.1% year-on-year—down from a hotter 3.7% in August 2024. The star of the show? Food prices, which stayed in deflation for the third straight month. That’s a drop of -0.7% in the food index this August, compared to 5.7% last year. Veggies, pulses, fruits, meat, fish, and eggs all saw major price softening, giving households a breather.
Even oilseeds, which usually stick to higher prices due to global trends, have started to moderate a bit. But keep an eye on domestic prices, as sowing has slowed down. On a month-on-month basis, the seasonally adjusted food price index only rose by 0.8% in August, showing the downward trend is holding strong.
BoB’s own Economic Condition Index (ECI) for the first 10 days of September 2025 stands at -0.9%, pointing to more price softening ahead. Plus, weather hiccups haven’t messed with supplies of key items like tomatoes, onions, and potatoes (TOP veggies), keeping things stable.
On the flip side, core inflation—stuff like housing and education—has stayed steady, and excluding gold, it’s still low. All in all, this paints a positive picture for India’s economy and your shopping bills in the months to come. Stay tuned for updates on inflation trends!
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