Has inflation been eradicated? 

November 17, 2025

Abhishek Vij

New data from the Ministry of Industry suggests that Indians have overcome their biggest problem: inflation. Now, investors are pressuring them to revise monetary policy and further reduce the repo rate, as the Indian market has finally recovered from inflation. A reduction in the repo rate increases liquidity for banks, allowing them to offer cheaper loans to a wider range of investors. The Monetary Policy Committee is scheduled to meet from December 3rd to 5th. Investors are demanding a reduction in the repo rate. Remember, earlier this month, the Reserve Bank kept the repo rate stable at 5.50 percent. This year, the repo rate has been reduced by one percent. Our monetary policy is pursuing a dual strategy of controlling inflation and increasing investment.
Currently, the Ministry of Industry or the ruling party claims that reducing GST rates and reducing the GST to two slabs has reduced commodity prices.

Therefore, a policy of investment promotion should be adopted to bid farewell to inflation. Data shows that both retail inflation and wholesale inflation have reached their lowest levels in the last 27 months. This inflation rate has fallen below zero to -1.21 percent in the last 27 months. Furthermore, the rate of goods has also fallen to a level never seen before, 8.31 percent. Food inflation accounted for this percentage drop in retail inflation, while retail inflation is 0.25 percent this month. India Ratings Research predicts that wholesale and retail inflation will continue to decline. This is due to softening international crude oil prices, ample food grain reserves in the country, and good crop production. Wholesale inflation has been controlled, while retail inflation is also falling. Inflation is measured by the price index of food items in the country. Their fluctuations also cause fluctuations in retail inflation.

The country is fortunate that this time there are sufficient reserves in the market, and retail inflation has fallen below the Reserve Bank’s reserve rate.

The food inflation rate, which is 8.31 percent, was much higher than before. Economic analysts say that the decline in inflation will continue. Therefore, the government should now focus on growth through investment, reducing the repo rate, and loan interest rates. But how valid is this argument? The national price index should not be based solely on food prices; it must also take into account fluctuations in capital rates. Investors’ costs must also be considered. Trump’s tariff hike has increased the cost of our exports, and this increased cost is causing demand to decline. If this happens, factory work will no longer be at its previous level.

Unemployment will increase, and the unpaid young generation will be caught in a dilemma where price indexes may appear low, but markets will remain expensive. In fact, retail prices in India often do not fall along with the wholesale price indexes. This is due to black marketing by retailers, who keep prices high by creating a mentality of scarcity. The country is dominated by unregulated markets that defy any rules. Their only attempt is to keep prices high by creating a psychological sense of artificial scarcity. Until these black marketeers are reined in, there’s no hope of any lasting control over inflation in the country.