Source: The Hindu
Context
The National Statistics Office (NSO) released the Consumer Price Index (CPI) data for June 2026, showing that India’s retail inflation increased to 4.38% (rounded to 4.4%) from 3.93% in May 2026. This is the first time inflation has crossed the RBI’s 4% target under the new CPI series (Base Year 2024).
Key Highlights
- Retail Inflation (CPI): 4.38% (June 2026).
- Previous Month: 3.93% (May 2026).
- CPI Base Year: 2024 (effective January 2026).
- Released by: National Statistics Office (NSO), Ministry of Statistics and Programme Implementation (MoSPI).
Major Reasons for Rise in Inflation
1. Increase in Food Prices
- Food inflation rose to 5.32%, the highest under the new CPI series.
- Prices of ginger, tomato, raisins (kishmish), and monacca increased significantly.
2. Higher Fuel Prices
- Rise in global crude oil prices following geopolitical tensions in West Asia.
- Petrol and diesel price hikes pushed transport inflation to 4.31%.
3. Weak Monsoon
- June 2026 recorded a 42.8% rainfall deficit.
- Lower rainfall affected agricultural production and food supply.
4. Precious Metals
- Safe-haven demand led to sharp increases in jewellery prices.
- Silver jewellery inflation: 133.21%.
About Consumer Price Index (CPI)
- Measures retail inflation faced by consumers.
- Published by the National Statistics Office (NSO).
- Used by the Reserve Bank of India (RBI) for monetary policy decisions.
- Covers both rural and urban consumption.
- The Food & Beverages group has the highest weight (about 45.86%) in CPI.
Practice MCQs
Q1. With reference to the new CPI series:
- Its base year is 2024.
- It became effective from January 2026.
- It includes data from online markets for the first time.
- It replaces the older series with base year 2011-12.
How many are correct? (a) Only one (b) Only two (c) Only three (d) All four
Answer Key
- (d) — All correct.
Exam Relevance
- UPSC Prelims & Mains: CRITICAL — GS-III (Indian Economy, Monetary Policy, Inflation); Prelims (CPI, RBI target, MPC, base year); Mains-Essay on inflation-growth trade-off.
- RBI Grade B / SIDBI / SEBI / IRDAI: CRITICAL — Direct ESI content.
- NABARD Grade A: HIGH — Rural inflation + food prices.
