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Rural Food Inflation Stays Negative, Easing Burden on Farm Labourers

Food inflation for agricultural and rural labourers remained in negative territory in December 2025, providing relief to vulnerable segments. The Labour Bureau has revised the base year for the Consumer Price Index to 2019, enhancing its scope and methodology. India's overall CPI inflation was 1.33% for December, slightly higher than November. The RBI has cut the repo rate and forecasts a benign inflation outlook of 2% for FY 2025-26.

Key Points: Rural Food Inflation Negative in Dec 2025, RBI Cuts Rates

  • Food inflation negative for farm labourers
  • New 2019 base for CPI indices
  • Overall CPI inflation at 1.33%
  • RBI cuts repo rate to 5.25%
2 min read

Food inflation for farm and rural labourers stays in negative zone during December

Food inflation for agricultural & rural labourers stays negative in Dec 2025. CPI indices revised with 2019 base. RBI cuts repo rate as outlook remains benign.

"The decline in the inflation rate... is a welcome relief for these vulnerable segments - Ministry Report"

New Delhi, Jan 21

The year-on-year inflation rates based on the all-India consumer price index for agricultural labourers and rural labourers for December 2025 have been estimated at 0.04 per cent and 0.11 per cent, respectively, figures released by the Ministry of Labour & Employment on Wednesday showed.

The food inflation for agricultural and rural labourers stayed in the negative -- (-) 1.8 per cent and (-) 1.73 per cent. respectively -- as prices of food items fell during the month due to increased production.

The decline in the inflation rate in recent months is 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 Labour Bureau, under the Ministry of Labour & Employment, has revised the base year of the Consumer Price Index Numbers for Agricultural Labourers and Rural Labourers to 2019=100 since June this year. These indices are based on data collected from a set of 787 sample villages across 34 states and UTs.

The newly constructed CPI - AL & RL series (Base: 2019=100) replaces the earlier 1986-87=100 series.

The revised series has significantly enhanced the scope and coverage and incorporated many methodological changes in order to make the indices more robust.

Calculation of prices of PDS items has been done using the admissibility concept instead of availability as in the old series; the revised series covers 34 states and UTs as against 20 states in the old series; prices are collected from 787 sample villages as against 600 villages in the old series; and cover 150-200 as against 65-106 items in the old series.

Meanwhile, India's overall inflation rate based on the Consumer Price Index (CPI) was estimated at 1.33 per cent for December, 2025, which is marginally higher than the corresponding figure of 0.71 per cent for November.

The overall outlook for inflation remains benign. The RBI's monetary policy committee (MPC) last month slashed its forecast for India's inflation rate for the financial year 2025-26 to 2 per cent from 2.6 per cent predicted in October due to the sharp decline in food prices and the GST rate cuts playing out.

RBI Governor Sanjay Malhotra announced a reduction in the repo rate by 25 basis points to 5.25 per cent from 5.5 per cent earlier, as inflation has come down, and the monetary policy could focus on boosting growth.

- IANS

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Reader Comments

S
Sarah B
While the negative inflation number looks positive, I'm curious about the methodology. The article mentions the base year revision and increased coverage. Is this lower inflation a true reflection of ground reality, or partly a statistical effect of the new series? A respectful question for the experts.
P
Priyanka N
Increased production leading to lower prices is the ideal scenario. But we must ensure farmers are not suffering due to low prices. MSP and procurement mechanisms need to be strong so that the benefit is for both consumers and producers. Jai Kisan!
V
Vikram M
Good step by RBI to cut rates. Lower inflation means more purchasing power in the hands of rural India. This should boost demand for goods beyond just food - maybe a new mobile phone or better clothes for the family. Positive cycle can start.
A
Aman W
The data is from 787 villages now, much better than 600. Hope they are collecting prices from *actual* village markets and not just district headquarters. On-ground price of vegetables and dal can be very different. Still, promising report.
N
Nisha Z
As someone from a rural background, I can say this relief is badly needed. But inflation is only one part. Stable employment and timely wages are equally important for a "better lifestyle" as the article says. Let's not forget that.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

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