SF Prep Notes

CPI inflation at 1.33% in December 2025; food inflation negative for seventh month

Retail inflation based on the All India Consumer Price Index was 1.33% (provisional) in December 2025, MoSPI said on 12 January 2026, staying below the RBI's lower tolerance limit for a fourth straight month.

Summary

All India Consumer Price Index (CPI) inflation was 1.33% (provisional) in December 2025 over December 2024, the Ministry of Statistics and Programme Implementation (MoSPI) said on 12 January 2026, up 62 basis points from November. Headline inflation stayed below the RBI's lower tolerance limit for the fourth consecutive month. Food inflation based on the Consumer Food Price Index was −2.71%, negative for the seventh consecutive month, though 120 basis points higher than in November. The rise was mainly due to personal care and effects, vegetables, meat and fish, egg, spices, and pulses. Under Section 45ZA of the RBI Act, 1934, the Central Government sets the CPI inflation target of 4% with a lower tolerance limit of 2% and an upper limit of 6%, retained for April 2021 to March 2026.

Key facts

Headline CPI (Dec 2025)
1.33% (provisional), +62 bps over Nov 2025
Food inflation (CFPI)
−2.71%; rural −3.08%, urban −2.09%
Rural headline
0.76% (Nov: 0.10%)
Streak
Below RBI's lower tolerance limit for 4th straight month; food negative 7th month
Base
2012=100
Released
12 January 2026, MoSPI
Inflation target (RBI Act, Sec 45ZA)
4% CPI, tolerance band 2%–6% (Apr 2021–Mar 2026)

Practice MCQs 4 questions

Q1

What was India's year-on-year CPI (headline) inflation for December 2025, as released by MoSPI on 12 January 2026?

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Correct answer: B β€” 1.33%

PIB (MoSPI): headline CPI inflation for December 2025 was 1.33% (provisional), 62 basis points higher than November 2025.

Q2 Advanced

What was the all-India food inflation (CFPI) for December 2025?

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Correct answer: B β€” −2.71%

PIB (MoSPI): CFPI inflation for December 2025 was −2.71% (provisional); rural −3.08% and urban −2.09%.

Q3 Advanced

Consider the following statements about CPI data for December 2025: 1. Headline inflation stayed below the RBI's lower tolerance limit for the fourth consecutive month. 2. Food inflation was negative for the seventh consecutive month. 3. Headline inflation fell compared with November 2025. Which of the statements given above is/are correct?

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Correct answer: B β€” 1 and 2 only

PIB (MoSPI): statements 1 and 2 are correct. Statement 3 is wrong: headline inflation rose by 62 basis points over November 2025.

Q4 Advanced

Consider the following statements about India's inflation target, relevant to the December 2025 CPI data: 1. The Central Government, in consultation with the RBI, determines the inflation target under Section 45ZA of the RBI Act, 1934. 2. The target is 4% CPI inflation with a lower tolerance limit of 2% and an upper tolerance limit of 6%. 3. The six-member Monetary Policy Committee is constituted under Section 45ZA. Which of the statements given above is/are correct?

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Correct answer: B β€” 1 and 2 only

RBI (Monetary Policy overview): the target is set under Section 45ZA, at 4% CPI with 2% and 6% tolerance limits, retained for April 2021 to March 2026. Statement 3 is wrong: the MPC is constituted under Section 45ZB.

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