India’s retail price inflation based on the Consumer Price Index (CPI) declined to 5.48 per cent in November as the increase in prices of food items eased during the month bringing relief to household budgets, said the Ministry of Statistics on Thursday.

The slowing inflation marks a reversal of the increasing trend in the previous two months when the inflation rate touched 6.21 per cent in October.

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“During the month of November, a significant decline in inflation is observed in vegetables, pulses, sugar and confectionery, fruits, eggs, milk and products, spices, transport and communication and personal care and effects subgroups,” according to the official statement.

The top five items showing the highest year on year Inflation at the all-India level in November are garlic (85.14), potato (66.65), cauliflower (47.70), cabbage (43.58) and coconut oil (42.13), according to the official figures.

The key items having the lowest year-on-year inflation in November 2024 are zeera (-35.04), ginger (-16.96), LPG used as cooking gas (-10.24) and dry chillies (-9.73).

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 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.

The Reserve Bank of India (RBI) on Friday 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 on the outlook for the economy, observing that “the balance between inflation and growth is well poised.”