High inflation eroded purchasing power, hit households’ savings before 2014: Centre
As India's retail inflation hit six-year low in March, the government data showed on Wednesday that average annual inflation between 2004–05 and 2013–14 stood at 8.2 per cent, reflecting a decade marked by considerable volatility in retail prices and households across the country bearing the brunt of steep increases in food and fuel prices.
According to the Ministry of Finance, between 2009-10 and 2013–14, India faced a prolonged period of high inflation, with the average annual rate remaining in double digits.
It eroded purchasing power and created a challenging environment for both consumers and businesses.
"In sharp contrast, the 10-year period from 2015–16 to 2024–25 witnessed a marked decline in inflationary pressures, with the average rate coming down to 5 per cent," according to a ministry statement.
This significant moderation reflects the sustained efforts of both the government and the Reserve Bank of India to improve price stability through better supply-side management, fiscal prudence, and inflation-targeting monetary policy.
"The shift from a high-inflation era to a more stable pricing environment has provided greater certainty for consumers and strengthened the foundation for long-term economic growth," the ministry maintained.
The steady decline in retail inflation over recent years marks a crucial milestone in India’s economic journey, reflecting the success of coordinated efforts by the government.
From proactive monetary policies to targeted fiscal measures that safeguard consumers, especially the vulnerable, from volatile price swings, the approach has been both inclusive and effective.
"With inflation now at its lowest since 2018–19, India has not only reinforced macroeconomic stability but also created an enabling environment for sustainable growth. This trajectory underscores the country’s resilience and commitment to ensuring price stability without compromising on development goals," the ministry emphasised.
Retail inflation in India, as measured by the Consumer Price Index (CPI), which reflects the cost of everyday goods and services, fell to a remarkable 4.6 per cent in the fiscal year 2024-25, the lowest since 2018-19.
Notably, the year-on-year inflation rate for March 2025 dropped to 3.34 per cent, a decline of 27 basis points from February 2025, marking the lowest monthly inflation rate since August 2019.
