The latest Economic Survey has reiterated inflation will progressively align to the 4% target, outlining supply-side debottlenecking to manage food inflation.
“Estimates suggest that India’s retail price inflation will align progressively with the target. Global commodity prices are expected to decline, potentially easing core and food inflation,” the Economic Survey said.
Long-term price stability could be achieved by robust data systems for monitoring prices, developing climate-resilient crops, reducing crop damage and post-harvest losses, it said.
The Reserve Bank of India (RBI) and the International Monetary Fund (IMF) have projected that India’s consumer price inflation will progressively align towards the inflation target in FY’26.
In December 2024, the Monetary Policy Committee revised its inflation projection from 4.5% to 4.8% in FY’25. Assuming a normal monsoon and no further external or policy shocks, the RBI expects headline inflation to be 4.2%in FY’26.
The IMF has projected an inflation rate of 4.4% in FY25 and 4.1%in FY26 for India.
According to the World Bank’s Commodity Markets Outlook, October 2024, commodity prices are expected to decrease by 5.1% in 2025 and 1.7% in 2026.
The survey has suggested focused research is needed to develop climate-resilient crop varieties, enhancing yield and reducing crop damage to tackle persistent deficit in the production of pulses and oilseeds, along with frequent fluctuations in tomato and onion production, leading to price pressures.
Efforts to expand the area under pulses in rice-fallow regions are likely to help.
It also says that farmers should receive training on best practices, the use of high-yield and disease-resistant seed varieties, and targeted interventions to improve agricultural practices in the major growing regions for pulses, tomatoes, and onions.
Besides it has called for implementing robust data collection and analysis systems to monitor prices, stocks and storage and processing facilities is essential in various tiers of government.
