Blitz Bureau
NEW DELHI: The year-on-year inflation rates based on the all-India Consumer Price Index for Agricultural Labourers and Rural Labourers in December 2024 declined to 5.01 per cent and 5.05 per cent, respectively, compared to the corresponding figures of 7.71 per cent and 7.46 per cent in the same month of the previous year, according to data released by the Ministry of Labour and Employment on January 23. The inflation rate for both categories of labourers has been coming down over the last four months.
The easing of the inflation burden for both agricultural and rural labourers comes as a welcome relief for these vulnerable segments that are hit hardest by spiralling prices. It also leaves more money in their hands to buy a wider range of goods, leading to a better lifestyle.
The decline also comes in the backdrop of India’s retail price inflation based on the CPI index declining to a four-month low of 5.22 per cent in December as prices of vegetables, pulses and sugar eased during the month bringing respite to household budgets.
The easing of inflation reflects a steadily declining trend after having touched a 14-month high of 6.21 per cent in October. CPI inflation had declined to 5.48 per cent in November.
The easing in inflation is a welcome sign as it was the first time that the rate of retail inflation crossed the RBI’s upper limit of 6 per cent in October. The RBI is waiting for the retail inflation to come down to 4 per cent on a durable basis before it can go in for an interest rate cut to propel growth.
During its last policy review, the RBI slashed the cash reserve ratio (CRR) for banks by 0.5 per cent to make more funds available for lending to spur economic growth but kept the key policy repo rate unchanged at 6.5 per cent with an eye on inflation.
The CRR has been reduced from 4.5 per cent to 4 per cent which will infuse Rs 1.16 lakh crore into the banking system and bring down market interest rates.
The monetary policy decision maintains a delicate balance between controlling inflation and pushing up the growth rate in a slowing economy, In his last monetary policy view, former RBI Governor Shaktikanta Das said, “India’s growth story is still intact. Inflation is on the declining path, but we cannot overlook the significant risks in the outlook. This risk cannot be underestimated.”
He was optimistic about the outlook for the economy, observing that “the balance between inflation and growth is well poised”.
