Inflation is normal, permanent, and uneven. This page uses 30 charts to explain what is happening to your money, why, and what you can actually do about it.
Inflation is the speed at which prices rise, not the prices themselves. Hold on to that one idea and the rest of this page falls into place.
01Myth
Myth: Inflation fell, so prices are falling.
Reality: No. Lower inflation means prices are still rising, just more slowly. Prices only actually fall when inflation turns negative, which is called deflation and is rare.
02Myth
Myth: Low inflation means things are cheap now.
Reality: No. It means prices rose slowly this year. They are still higher than last year, and far higher than a decade ago. The increases simply got smaller.
03Myth
Myth: Inflation is the price of things.
Reality: No, it is the rate of change. A packet going from Rupees 100 to 105 is 5% inflation; 105 to 107 the next year is about 2%, lower inflation but a higher price.
The temperature of inflation
India’s worst year ever (1974) was 29%: high, but never near the runaway end. Hyperinflation runs into the thousands of percent, off the right of this scale.
A worked example: why a falling rate still hurts
2023₹110+10%
2024₹115+4.5%
2025₹117+1.7%
Prices rose every single year. Inflation fell from 10% to 1.7%, but the price climbed from ₹100 to ₹117 and never came back down. Falling inflation means the climb got gentler, not that you got your money back.
When money breaks: hyperinflation
23,773%Congo’s 1994 inflation. India’s worst year ever was 29%.
At the nightmare end of the scale, money loses meaning. At Bolivia in 1985 (11,750%) or Congo in 1994 (23,773%), prices doubled within weeks. People spent their wages the moment they were paid, and lifetime savings vanished. India has never come close: its worst year ever, 1974, was 29%.
This is why money cannot sit still
Cash kept at home loses about 5% of its value every year, quietly and invisibly.
A bank fixed deposit only protects you if its rate beats inflation. Right now it does, by roughly 5 percentage points; in 2022 it did not.
To stay ahead of prices, savings have to grow faster than them, which is why Indians put money into gold, property and shares, not just the almirah.
This is how inflation works, not investment advice.
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What ₹100 from 2012 buys today
By December 2025, ₹100 in 2012 rupees had the purchasing power of just ₹51.
MoSPI
₹ (2012 rupees)
About this chart
This line chart shows how a fixed ₹100 note from 2012 has lost value over time. In January 2011, ₹100 could buy goods costing ₹112 in 2012 prices. But as inflation pushed prices up, the same note bought less and less, reaching ₹51 by December 2025. The decline is smooth because inflation compounds: even small annual rates slowly eat away value. For a saver, this means cash stuffed under the mattress would have halved in purchasing power in just 14 years. The chart uses monthly data from MOSPI’s CPI combined index, inverted to show purchasing power.
Why this chart It translates abstract percentages into a concrete, relatable number every Indian understands.
How to read it Follow the line downward: the lower it goes, the less your 2012 rupee buys today.
Watch out Don't confuse this with the value of a 2012 coin or note; this is about what a fixed sum from 2012 can buy today.
Inflation is the gradual loss of a currency’s purchasing powerPurchasing powerIf a cup of chai cost ₹10 in 2012 and ₹20 today, your ₹100 note from 2012 now buys only five cups instead of ten, its purchasing power is half. This is not about the note being torn; it is about prices rising. Purchasing power is the inverse of the price level: when the CPI doubles, your rupee buys half as much as before.The first chart shows that ₹100 from 2012 buys only ₹51 worth of goods today. That is a direct measure of how inflation has shrunk the value of money in your wallet.. When you hear ‘inflation was 1.3% in December 2025’, that means a basket of goods and services that cost ₹100 a year ago now costs ₹101.30. That sounds small, but low, persistent inflation is like a slow leak in a tyre, over years it leaves you flat.
India’s consumer price index (CPI) tracks what families actually pay. It is built from over 250 items, with weights based on how much households spend on each. The headline number hides wildly different stories beneath it. This page walks you through 30 charts that explain how inflation works, what it is doing right now, and why your budget feels the way it does.
This is the most honest inflation chart. In January 2011, ₹100 could buy goods that, by the CPI basket, would have cost ₹112 in 2012 rupees. By December 2025, that same ₹100 could buy only ₹51 worth of 2012 goods. In 14 years, the rupee lost half its purchasing power. That is the power of compounding, even when annual inflation is modest, the erosion adds up.
Prices are over 90 times their 1960 level
The long view is even starker. A basket that cost ₹1 in 1960 cost ₹92.10 by 2025. That means a ₹100 note in 1960 would buy only ₹1 worth of goods today. Inflation over decades is not a bug of a growing economy, it is a feature. But this multiple reminds us that every generation starts from a higher price base.
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Prices are over 90 times their 1960 level
Prices in 2025 were 92.1 times higher than in 1960.
World Bank · FP.CPI.TOTL.ZG + MOSPI monthly CPI splice
x (1960=1)
About this chart
This line chart plots how many times prices have multiplied since 1960, using World Bank CPI data. Starting at 1 in 1960, the multiple rises slowly at first, then steepens after the 1970s. By 2025, it reaches 92.1, meaning a basket that cost Re 1 in 1960 costs ₹92.10 today. This dramatic rise is the result of decades of cumulative inflation, averaging around 5-6% per year. The chart uses a linear scale, so the acceleration is visible, but the real lesson is that even ‘moderate’ inflation over a long period can produce a huge increase in the price level.
Why this chart It gives the generational perspective that a single year’s inflation rate cannot convey.
How to read it The line shows the multiple: at each year, the value on the y-axis is how many times 1960 prices the current level is.
Watch out Do not interpret this as the value of a 1960 rupee; it is a multiple of the price level.
India’s inflation rate, 1960 to today
The annual inflation rate has swung between a peak of 29% in 1974 and a low of -7.6% in 1976. In 2025 it was 2.2%. High inflation was the norm in the 1970s and early 1980s, but since the 1990s it has come down to a 5–8% range, and the recent 2.2% is unusually subdued. The chart shows that inflation is almost never zero, a modern economy almost always runs a small positive rate.
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India's inflation rate, 1960 to today
Annual CPI inflation has swung from 29% in 1974 to 2.2% in 2025, and has generally moderated since the 1990s.
World Bank · FP.CPI.TOTL.ZG + MOSPI monthly CPI splice
% per year
About this chart
This annual time series from the World Bank shows the year-on-year change in consumer prices. The spikes in 1974 (29%) and 1981 (20%) stand out, linked to oil shocks and monsoons. After 1991, inflation became less volatile, hovering in the 5-10% range. The 2025 figure of 2.2% is one of the lowest in decades, helped by falling food prices. The chart illustrates that inflation is not a new phenomenon, and that India has experienced much higher rates in the past without becoming hyperinflationary.
Why this chart It provides the long-term historical context for judging whether current inflation is high or low.
How to read it Each point is the percentage change from the previous year; peaks mean prices rose sharply.
Watch out Do not assume a low reading means prices are low; it means prices rose slowly compared to the prior year.
Average inflation, decade by decade
The 1960s saw average inflation of 5.9% per year. It peaked at 7.7% in the 1990s and is running at 5.2% in the 2020s so far. India has never had a decade of zero inflation. The cleanest long story is one of moderate, persistent inflation, with the 1970s and 1980s the worst decades.
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Average inflation, decade by decade
Decadal average inflation has ranged from 5.2% in the 2020s to 7.7% in the 1990s.
World Bank · decade average
% per year
About this chart
This bar chart groups annual inflation into decadal averages. The 1960s started at 5.9%, the 1970s jumped to 7.2%, the 1980s were 7.5%, the 1990s peaked at 7.7%, and then it eased to 5.5% in the 2000s and 5.6% in the 2010s. The 2020s so far average 5.2%. This view smooths out year-to-year noise and shows that India’s inflation has been remarkably persistent within a narrow band. The highest decade was the 1990s, not the more famous 1970s, because the latter had both high inflation and a deflationary year in 1976.
Why this chart It shows the ‘normal’ range of Indian inflation, helping readers calibrate expectations.
How to read it The height of each bar is the average annual inflation for that decade. Compare bars to see which decade was hotter.
Watch out A decade average can hide years of extreme volatility; the 1970s had a 29% peak but also a -7.6% trough.
Inflation month by month since 2012
The monthly CPI inflation rate since January 2012 shows big swings. It started at 6.3% in January 2012, touched 12.2% in November 2013, and then moderated. In December 2025 it was 1.3%. The volatility comes mainly from food: a good monsoon or a supply disruption can push the headline up or down by 2–3 percentage points in a month.
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Inflation month by month since 2012
Monthly CPI inflation has varied between 12.2% and 1.3%, with food often driving the swings.
MoSPI
% YoY
About this chart
From the MOSPI CPI combined general index, this line chart tracks year-on-year inflation each month from January 2012 to December 2025. It started at 6.3%, spiked to 12.2% in November 2013, then generally declined with periodic surges (e.g., 7.6% in July 2020). The recent plunge to 1.3% in December 2025 was largely due to a sharp drop in food prices. The chart shows that even within a low-inflation decade, monthly rates can swing widely, affecting household budgets and RBI policy.
Why this chart It captures the lived experience of inflation volatility in the modern CPI era.
How to read it Look at the peaks and troughs: high points mean prices were rising fast compared to the same month last year.
Watch out A single monthly blip should not be taken as a new trend; always look at the broader path.
The sticky core: inflation without food and fuel
If you strip out volatile food and fuel, you get core inflationCore inflationThink of a fruit basket from which you remove the most squishy, unpredictable items, say, mangoes and coconuts, and keep only the sturdy apples. Core inflation does that with the CPI: it strips out food and fuel prices because they swing wildly due to monsoons, global oil prices, or supply gluts. What remains, rent, tuition fees, medical bills, changes more slowly and tells you about the deep, sticky price trends in the economy.In December 2025, headline inflation was 1.3% because food prices fell, but core was 4.6%. So the underlying trend was still pushing prices up, even if vegetables gave temporary relief.. In December 2025, core inflation was 4.6%, while headline was 1.3%. Core is stickier because services like health and education don’t bounce around like vegetable prices. Since January 2012, core inflation has dropped from 10.4% to 4.6%, but it remains above headline, telling us that underlying price pressures are still alive.
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The sticky core: inflation without food and fuel
In December 2025, core inflation was 4.6% versus headline 1.3%, revealing underlying price pressures.
% YoY
HeadlineCore (ex food and fuel)Food
About this chart
This multi-line chart overlays headline CPI inflation, core inflation (ex-food & fuel), and food inflation alone. Since 2012, core inflation has generally been lower than headline except when food spikes. But in late 2025, core at 4.6% far exceeded headline 1.3% because food inflation turned negative (-2.7%). Core tracks services and manufactured goods, which have steady demand and fewer supply shocks. The chart shows that even when headline drops, core can stay elevated, signalling that the economy’s underlying price trend has not disappeared.
Why this chart It explains why the RBI watches core inflation when setting rates.
How to read it Compare the gap between the lines: when core is above headline, food is pulling the average down.
Watch out Core does not mean ‘normal’ inflation; it simply excludes the most volatile categories.
Shops vs mandis: retail (CPI) vs wholesale (WPI)
The CPI measures what consumers pay; the wholesale price index (WPIWPI (Wholesale Price Index)CPI is at the shop; WPI is at the factory gate or mandi. It measures what producers and traders pay before things reach the retail shelf. WPI covers items like steel, crude oil, grains in bulk, and electricity. It does not include services, and its weights are based on production, not consumer spending. So a spike in WPI fuel does not immediately show up in your petrol bill, but it is a signal of where retail prices might go.In April 2026, WPI inflation was 8.3% while CPI was 1.3%. The gap warns that pipeline pressures could feed into consumer prices later.) measures what producers and traders pay. In April 2026, WPI inflation was 8.3%, but CPI inflation in December 2025 was 1.3%. The two do not move in lockstep because they cover different baskets and stages of the supply chain. WPI is more sensitive to global commodity prices and the rupee, while CPI captures the street-level reality.
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Shops vs mandis: retail (CPI) vs wholesale (WPI)
While CPI inflation was 1.3% in December 2025, WPI inflation shot up to 8.3% in April 2026, signalling pipeline pressure.
% YoY
CPI (retail)WPI (wholesale)
About this chart
CPI and WPI measure different baskets at different stages. CPI is what consumers pay; WPI is what producers pay. This chart plots both since 2013. WPI is more volatile because it includes globally priced commodities. In 2025-26, WPI surged due to fuel and primary articles, while CPI stayed low because food and retail fuel lagged. The wide gap is a reminder that low consumer inflation today does not guarantee low inflation tomorrow, as wholesale costs often pass through with a delay.
Why this chart It shows the different lenses on price changes and why businesses and households may have different experiences.
How to read it CPI (green) and WPI (black) lines; when WPI spikes above CPI, retail prices may follow later.
Watch out WPI and CPI are not directly comparable because their baskets are completely different.
Is India’s inflation high? A world comparison
Compared with other large economies, India’s inflation is neither exceptionally high nor exceptionally low. In 2024, India’s CPI inflation was 5.0%, the US was 2.9%, China 0.2%, Brazil 4.4%, Indonesia 2.2%, Vietnam 3.6%, Bangladesh 10.5%, and South Africa 4.4%. India tends to run a higher inflation rate than most peers because of food price sensitivity and a large informal sector.
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Is India's inflation high? A world comparison
India’s 5.0% inflation in 2024 was moderate, higher than the US and China, but far below Bangladesh’s 10.5%.
% per year
IndiaChinaBangladeshBrazil, Indonesia, Vietnam, South Africa, United States
Bangladesh10.5%India5.0%China0.2%Brazil, Indonesia, Vietnam, South Africa, United States
About this chart
This multi-line chart compares annual CPI inflation for India, the US, China, Brazil, Indonesia, Vietnam, Bangladesh, and South Africa from 1960 (or earliest available). India’s line (5.0% in 2024) runs above the US and China, around the middle of the pack. Bangladesh has recently experienced double-digit inflation. Brazil, once hyperinflationary, has stabilised. The chart shows that while Indian inflation is not exceptional, it has been persistently higher than advanced economies, reflecting structural factors like food weight and supply chain inefficiencies.
Why this chart It answers whether Indian inflation is out of line with the rest of the world.
How to read it Each country has a line; look for India’s relative position and how it has changed over time.
Watch out Direct comparisons are tricky because CPI baskets differ; Bangladesh may have a higher food weight, for instance.
The world’s worst inflations, and where India sits
Hyperinflation is when prices rise by 50% or more per month. India’s peak annual inflation of 29% (1974) is tiny next to the worst: DR Congo hit 23,773% in 1994, Bolivia 11,750% in 1985, and Argentina 220% in 2024. India has never come close to hyperinflation, which is why the rupee remains a stable currency despite the long erosion of value.
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The world’s worst inflations, and where India sits
India’s peak inflation of 29% in 1974 is dwarfed by peaks like DR Congo’s 23,773%, Bolivia’s 11,750%, and Argentina’s 220%.
World Bank · peak annual inflation · log scale
% in the peak year
About this chart
This bar chart on a log scale shows the worst annual CPI inflation ever recorded in selected countries. DR Congo tops at 23,773% in 1994, followed by Bolivia (11,750% in 1985), Peru (7,482% in 1990), Angola (4,145% in 1996), Brazil (2,948% in 1990), Israel (373% in 1984), Argentina (220% in 2024), Türkiye (105% in 1994), and then India (29% in 1974). India’s 29% looks tiny in comparison. This puts India’s worst inflation into perspective: we have never experienced hyperinflation, and the rupee has remained a credible store of value relative to many currencies.
Why this chart It inoculates against alarm: India’s inflation, even at its worst, was never in the hyperinflation league.
How to read it The longer the bar, the higher the inflation; log scale means a small increase visually represents a large multiple.
Watch out Do not read this as current inflation; it is historical peaks, some decades ago.
How India’s shopping basket shifted, 2012 to today
The CPI basket is updated periodically to reflect what households actually buy. In 2012, food and beverages made up 45.9% of the basket; by 2024, that share had dropped to 36.8%. Meanwhile, ‘Miscellaneous’ (services, education, health, transport) rose from 28.3% to 36.2%. This shift means the headline inflation number is now less dominated by food and more by services, which tend to have steadier, higher inflation.
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How India's shopping basket shifted, 2012 to today
Food’s share of the basket fell from about 46% to 37% in just over a decade, the clearest sign that Indian incomes are rising.
% of basket
About this chart
As households earn more, they spend a smaller fraction on food and more on everything else, health, education, transport, eating out. That is Engel’s law, and it is the whole story of these two strips: between the 2012 and 2024 bases, food and beverages dropped roughly nine percentage points while the ‘services & other’ bucket swelled from 28% to 36%. Housing, clothing and tobacco barely moved.
Why this chart It explains why the same inflation rate can feel different today than a decade ago: weights matter.
How to read it Each strip is one full basket adding to 100%. The top strip is the 2012 base, the bottom is the new 2024 base. Follow a single colour across the two strips to see how that category’s share moved, the food slice, first on the left, visibly shrinks.
Watch out These are shares of spending, not prices. A smaller food weight does not mean food got cheaper, only that it grew slower than the rest. The 2024 base uses finer categories, rolled up here to the 2012 groups so the two baskets are comparable.
Which categories actually drove the latest inflation
In December 2025, the overall CPI inflation was 1.3%. Food and beverages contributed -0.85 percentage points (meaning they pulled the number down), while Miscellaneous contributed +1.75 points. Housing added 0.29 points, fuel and light 0.13, clothing 0.09, and pan and tobacco 0.07. The story is clear: food was deflationary; services kept the headline positive.
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Which categories actually drove the latest inflation
Miscellaneous contributed 1.75 percentage points to the 1.3% headline, while food and beverages subtracted 0.85 points.
latest available · 2025-12
percentage points
About this chart
This bar chart shows the contribution of each major CPI group to the overall inflation in December 2025. Contributions are in percentage points. Food and beverages had a negative contribution of -0.85, meaning it lowered the headline by nearly 0.9 points. Miscellaneous added 1.75 points, housing 0.29, fuel and light 0.13, clothing 0.09, and pan and tobacco 0.07. So even though the headline was only 1.3%, it was entirely due to services and housing offsetting food deflation. Without the food drag, inflation would have been around 2.2%.
Why this chart It breaks down the headline into its drivers, showing what is really pushing prices up.
How to read it Each bar represents a category’s contribution; positive bars push inflation up, negative bars push it down.
Watch out These are contributions, not inflation rates of the categories. A small bar may still have high inflation if its weight is tiny.
What’s getting dearer fastest right now
Among the categories tracked, personal care and effects surged 28.2% in December 2025, miscellaneous (overall) 6.2%, health 3.4%, education 3.4%, pan and tobacco 3.0%, housing 2.9%, fuel and light 2.0%, household goods 1.9%, clothing and footwear 1.4%, recreation 1.2%, and food and beverages actually fell 1.9%. So while groceries got cheaper, services and personal items raced ahead.
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What's getting dearer fastest right now
Personal care and effects shot up 28.2% in December 2025, while food and beverages fell 1.9%.
latest available · 2025-12
% YoY
About this chart
This bar chart ranks categories by their year-on-year inflation rate in December 2025. Personal care and effects lead at 28.2%, followed by miscellaneous (overall) 6.2%, health 3.4%, education 3.4%, pan and tobacco 3.0%, housing 2.9%, fuel and light 2.0%, household goods 1.9%, clothing 1.4%, recreation 1.2%, and food and beverages at -1.9%. The extreme disparity shows that the headline 1.3% is an average that hides a wide spread: some items like gold and mustard oil are surging, while vegetables and pulses are plunging.
Why this chart It reflects the real-world feeling that some bills are climbing fast even if the overall number is low.
How to read it The bar length shows the inflation rate; longer bars to the right indicate faster price rises.
Watch out A high inflation rate in a small category like personal care may not affect your overall budget much.
How each part of life got pricier since 2012
The price index for each major group shows cumulative change since 2012 (base=100). By December 2025, pan and tobacco had hit 215.9, food and beverages 202.1, clothing 197.6, miscellaneous 198, health 204.8, education 196.1, housing 186.9, transport and communication 172.4, and fuel and light 181.3. Pan and tobacco lead, driven by tax hikes, but health and education are right behind.
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How each part of life got pricier since 2012
By December 2025, pan and tobacco prices had more than doubled (index 215.9), while transport and communication rose the least (172.4).
index (2012=100)
One panel for each line, all on the same scale, ordered by the latest value; the grey lines behind each are the others. The figure at each panel's head is its latest value.
About this chart
This multi-line chart plots the price indices (2012=100) for the six major CPI groups from January 2011 to December 2025. All lines rise, but at different slopes. Pan and tobacco is the steepest, driven by sin taxes. Food and beverages, despite volatility, ended at 202.1, roughly doubling. Miscellaneous (198), clothing (197.6), health (204.8), education (196.1), housing (186.9), and transport (172.4) all show cumulative inflation of 70-100% over 14 years. The compounded effect means that even if annual rates seem low, the long-term impact is substantial.
Why this chart It visualises how different parts of the budget have been eroded at different speeds.
How to read it Each line represents the price index for a category; the higher the line, the more prices have risen since 2012.
Watch out Indices are not inflation rates; a line going up by 80 points does not mean 80% inflation, it means the index went from 100 to 180.
Food swings drive the headline
Because food still makes up over a third of the basket, its violent swings steer the headline. In December 2025, consumer food price inflation was -2.7%, pulling the combined headline down to 1.3%. When vegetables spike, the headline jumps; when they crash, as they did in late 2025, the headline falls.
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Food swings drive the headline
When food inflation crashes (e.g., -2.7% in December 2025), the headline inflation plunges to 1.3%.
% YoY
FoodHeadline (all items)
About this chart
This chart overlays consumer food price inflation and headline CPI inflation since 2012. The two lines move almost in tandem, with food slightly more volatile. In December 2025, food inflation was -2.7% and headline 1.3%. Earlier, when food spiked in 2020, headline followed. Because food still weighs over a third in the basket, its gyrations dominate the monthly swings. This explains why inflation can feel like a rollercoaster even though underlying non-food prices are sticky.
Why this chart It demonstrates that the headline number is largely a food story for short-term moves.
How to read it Follow the two lines; when food (dashed) dips, headline (solid) dips too.
Watch out Do not confuse food inflation with food index level; negative inflation means prices fell compared to a year ago, not that they are low.
How food prices climbed, group by group
Within food, cereals reached an index of 197.4 by December 2025, vegetables 210.6, pulses 181.8, oils and fats 196.1, and milk 192.3. Vegetables are the most volatile, while cereals and milk grind up steadily. Pulses and oils have also had sharp spikes.
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How food prices climbed, group by group
Vegetables reached an index of 210.6 by December 2025, while milk was at 192.3 and cereals 197.4.
index (2012=100)
Vegetables211Cereals197Milk192Pulses, Oils & fats
Vegetables211Cereals197Milk192Pulses, Oils & fats
About this chart
This chart plots price indices for five food sub-groups: cereals, vegetables, pulses, oils & fats, and milk. Vegetables show the wildest swings, spiking during supply shocks. Cereals and milk climb more steadily. By December 2025, vegetables had risen 110.6% from 2012, while milk rose 92.3%. Oils and fats also saw a big run-up, particularly in 2021-22, but then moderated. This breakdown shows that not all food items are equally inflationary; staples like cereals and milk are more predictable, while vegetables remain the joker in the pack.
Why this chart It reveals why your thali cost changes so much month to month.
How to read it Each line is a sub-index; steeper lines mean faster cumulative price rise.
Watch out Vegetable index volatility does not mean the price of all vegetables moves together; tomatoes can double while onions crash.
The food prices that whipsaw
Vegetables inflation in December 2025 was -18.5%, pulses -15.1%, but oils and fats +6.8%. Vegetable prices can halve or double in a year due to weather and supply chains. This volatility feeds directly into household anxiety.
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The food prices that whipsaw
Vegetable inflation swung from -31.9% in January 2012 to over +30% at times, and was -18.5% in December 2025.
% YoY
VegetablesPulsesOils & fats
About this chart
This chart focuses on the year-on-year inflation rates for vegetables, pulses, and oils & fats. These are the most volatile food components. Vegetable inflation can move from deep negative to high positive within a few months, driven by rainfall, supply chains, and seasonality. Pulses also see sharp spikes due to production cycles. Oils are influenced by global edible oil prices. In December 2025, vegetables were at -18.5%, pulses at -15.1%, but oils were up 6.8%. The wide swings explain why headlines can change dramatically from one month to the next.
Why this chart It isolates the noisiest items that confuse the inflation story.
How to read it Look at the amplitude of swings; a line that jumps from -30% to +30% shows extreme volatility.
Watch out A negative number here means prices are lower than a year ago, which is deflation in that category, not a mistake.
The price of onion, tomato and potato
The iconic trio: onion index reached 201.3 in December 2025, tomato 259.6, and potato 172.5. Tomato has more than doubled since 2014, while potato has had a gentler climb. But their month-to-month inflation can swing wildly, onion fell 48.1% year-on-year, tomato was up 14.4%, and potato down 35%. These are the prices that make headlines and political careers.
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The price of onion, tomato and potato
Tomato index hit 259.6 in December 2025, while onion was 201.3 and potato 172.5.
index (2012=100)
OnionTomatoPotato
About this chart
This trio of lines tracks the price indices for the three most politically sensitive vegetables. All start at varying levels in 2014 (onion 173.4, tomato 101.3, potato 122.1). Tomatoes have seen the most dramatic increase, more than doubling, while onions and potatoes have also risen but with large fluctuations. Year-on-year, onion inflation was -48.1%, tomato +14.4%, potato -35% in December 2025, showing how even within the same month, different vegetables can move in opposite directions. These extreme moves affect not just household budgets but also political narratives.
Why this chart These three items are the face of food inflation in India, and their prices can swing elections.
How to read it Three lines indexed to 2012=100; tomatoes spiked, onions and potatoes more muted.
Watch out These are indices, not rupee prices per kg; a value of 200 means prices doubled from 2012.
What your groceries cost this year
Among individual grocery items, the highest year-on-year inflation in December 2025 was mustard oil at 8.2%, followed by eggs 4.8%, sugar 4.9%, milk 2.5%, while tomatoes (despite the index rise) had 14.4% inflation, potatoes -35%, onions -48.1%, rice -1.3%, and wheat -0.7%. The picture is mixed: some staples were cheaper, others cost more.
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What your groceries cost this year
Mustard oil led with 8.2% inflation, while onion crashed 48.1% and potato 35%.
latest available · 2025-12
% YoY
About this chart
This bar chart shows the year-on-year inflation for select grocery items in December 2025. Mustard oil (8.2%), eggs (4.8%), sugar (4.9%), milk (2.5%), and tomatoes (14.4%) were up. But rice (-1.3%), wheat (-0.7%), pulses (-5.4%), potato (-35%), and onion (-48.1%) were down. This mixed picture means a vegetarian thali might have cost less in December 2025 than a year ago, but an edible oil-based item was pricier. The chart conveys that inflation is not uniform even within a single shopping trip.
Why this chart It personalises inflation to the actual items you buy at the kirana store.
How to read it Bars to the right of zero indicate price rises; to the left, price falls.
Watch out These are year-on-year changes, not price levels; onion may still cost more than in 2012 even after a 48% drop.
The quiet compounders: health, education, transport
Services rarely spike in a single month, but they climb relentlessly. The health index hit 204.8, education 196.1, transport and communication 172.4. Over a decade, these compound to a big jump: a doctor’s visit and school fees double roughly every 10–12 years at current rates.
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The quiet compounders: health, education, transport
Health prices have more than doubled since 2012 (index 204.8), while transport grew 72%.
index (2012=100)
Health205Education196Transport & comms
About this chart
This line chart tracks the price indices for health, education, and transport & communication. All show a steady upward march with few dips. Health rose from 89.5 in January 2011 to 204.8 in December 2025; education from 87 to 196.1; transport from 90.3 to 172.4. Unlike food, these services rarely fall in price because labor and fixed costs dominate. The annual inflation rates in these categories have been consistently 3-5%, but compounding over 14 years leads to near-doubling. This is why families feel the squeeze on essential services year after year.
Why this chart It highlights the categories that are slowly but surely eating into disposable income.
How to read it Three smooth upward lines; the steeper the line, the faster the cumulative increase.
Watch out These are indices, not absolute costs; the actual rupee expense depends on both price and quantity consumed.
The price of school fees, doctors and medicine
By December 2025, tuition fees had an index of 204.7, doctor’s fee 223.6, and medicine 203. These are all up from around 100-117 in 2014. Education and health are the expenses families fear most, because they can’t easily cut back.
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The price of school fees, doctors and medicine
Doctor’s fee index hit 223.6, tuition fees 204.7, and medicine 203 by December 2025.
index (2012=100)
Doctor's fee224Tuition fees205Medicine203
About this chart
This chart zooms into three specific services: tuition fees, doctor’s fees, and medicine. From 2014 onwards, all three have climbed relentlessly. Doctor’s fees have risen the most, likely driven by healthcare inflation and higher practice costs. Tuition fees reflect the rising cost of education, often outpacing general CPI. Medicine prices, while regulated to some extent, have also doubled. The steady upward trajectory without any significant reversals underscores that these are the expenses you cannot avoid and that will only get costlier over time.
Why this chart It puts a number on the anxiety every parent and patient feels.
How to read it Three lines, all trending up; the highest line at the end shows the greatest cumulative rise.
Watch out Medicine index does not capture out-of-pocket spending on diagnostic tests or hospitalisation, which may be higher.
The price of fuel and power
Petrol index was 140.2, diesel 189.1, LPG cylinder 192.7, electricity 164.9. Since 2014, diesel and LPG have nearly doubled, while petrol has risen more modestly. Government policy and global crude prices drive these numbers, but the impact is felt every time you fill the tank or pay the electricity bill.
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The price of fuel and power
Diesel index rose to 189.1 and LPG to 192.7, nearly doubling since 2014, while petrol rose to 140.2.
index (2012=100)
PetrolDieselLPG cylinder, Electricity
About this chart
This chart tracks the price indices for petrol, diesel, LPG, and electricity. Diesel and LPG have risen the most because of periodic price deregulation and global oil price movements. Petrol has been relatively stable in recent years after earlier spikes. Electricity, often a regulated price, has risen more slowly but still reached an index of 164.9. The chart shows the direct impact of government policy and international markets on household energy costs. With the WPI fuel inflation at 24.7% in April 2026, further pressure on consumer prices may be ahead.
Why this chart Energy prices feed into transportation costs and kitchen budgets, making them a core inflation concern.
How to read it Four lines; the ones that have risen more steeply (diesel and LPG) show higher cumulative inflation.
Watch out These are not prices per litre but indices; a lower index for petrol doesn’t mean it’s cheaper than diesel in rupees.
The biggest price moves this year
The extremes tell the story of volatility: gold inflation was 68.7%, LPG cylinder 5.5%, mustard oil 8.2%, tomato 14.4%, but onion -48.1%, potato -35%, pulses -5.4%. The average hides these swings.
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The biggest price moves this year
Gold surged 68.7%, while onion crashed 48.1% in December 2025.
latest available · 2025-12
% YoY
About this chart
This bar chart captures the extreme outliers in year-on-year inflation for December 2025. Gold’s 68.7% jump stands out, reflecting global safe-haven demand and currency depreciation concerns. Mustard oil rose 8.2%, LPG 5.5%, tomato 14.4%. On the downside, onion fell 48.1%, potato 35%, and pulses 5.4%. These extremes show that inflation is not a uniform wave but a collection of micro-shocks. For households, the impact depends on their consumption basket: a gold-buying family saw a big expense rise, while a vegetarian kitchen felt relief.
Why this chart It brings the inflation story to life through the items people talk about at the market.
How to read it Horizontal bars sorted by magnitude; bars right of zero are price rises, bars left of zero are falls.
Watch out These are year-on-year changes; a 48% drop in onion may just be a correction from a previous spike.
Gold: the household hedge against inflation
Gold has been an extraordinary performer: its index reached 433.9 by December 2025, meaning its price more than quadrupled since 2014. Year-on-year gold inflation was 68.7%. For Indian households that hold gold as a store of value, this has handsomely beaten the cumulative erosion of the rupee.
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Gold: the household hedge against inflation
Gold index hit 433.9 in December 2025, meaning its price more than quadrupled since 2014.
MoSPI
index (2012=100)
About this chart
This single-line chart shows the CPI gold price index from 2014. Starting near 100, it has climbed almost monotonically, with a steep acceleration in 2024-25. The 68.7% annual inflation in December 2025 is the highest among all tracked items. For Indian households that traditionally hold gold as a store of value, this asset has far outpaced inflation, making it a superior hedge compared to cash savings. Even over the long term, gold has delivered positive real returns, reinforcing its cultural and economic role in portfolio protection.
Why this chart It validates the instinctive Indian preference for gold over bank deposits during inflationary periods.
How to read it A steeply rising line; the latest value shows how much richer gold buyers are in rupee terms.
Watch out Gold’s CPI index is not the market price; it is based on a surveyed price from a few centres, but the trend is accurate.
Does your fixed deposit beat inflation?
The ‘real returnReal returnSuppose your bank fixed deposit pays 7% interest a year. If inflation is 5%, your money grows only 2% in real terms, that is, after adjusting for the rising cost of things you buy. If inflation is 8%, your real return is -1%, meaning even though your balance increases, you can actually buy less than before. Real return = nominal interest rate minus inflation rate.The FD real return chart shows that in December 2025, savers were getting a positive real return of 4.46%, but in 2013 it was negative. This explains why Indian families often choose gold or real estate over bank deposits.’ on a fixed deposit after subtracting inflation was +4.46 percentage points in December 2025. That means if your FD paid 6.6% and inflation was 1.3%, your purchasing power actually grew. But over the past decade, there were periods (like 2013-2014) when real returns were negative, meaning your money was losing value even in a bank.
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Does your fixed deposit beat inflation?
In December 2025, the real return on an FD was +4.46 percentage points, after years of occasionally negative returns in the past.
IndiaDataHub
percentage points
About this chart
This chart computes the real return by subtracting CPI inflation from the average term deposit rate. From March 2013, the series has been positive for most months but dipped below zero in 2013-14 and briefly in 2020. The real return peaked in late 2025 as inflation crashed. A positive real return means your money is growing in purchasing power; a negative one means even though your account balance rises, you can buy less. This is why savers need to watch both interest rates and inflation, not just the nominal FD rate.
Why this chart It answers the most practical question: is my bank money safe from inflation?
How to read it The line above zero means your FD's purchasing power grew; below zero, it shrank.
Watch out This is a rough measure; your actual real return depends on your personal inflation rate and tax bracket.
FD rate vs inflation, the two lines behind the gap
The bank term-deposit rate was 6.6% in April 2026, while inflation was 1.3%. The gap, the real return, is what matters. Historically, when inflation spikes, the RBI eventually raises rates, but there is always a lag, and savers can suffer negative real returns for months.
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FD rate vs inflation, the two lines behind the gap
In April 2026, the FD rate was 6.6% and inflation 1.3%, yielding a wide positive gap.
% per year
FD rateInflation
FD rate6.6%Inflation1.3%
About this chart
This chart plots the bank term deposit rate and CPI inflation on the same graph. The gap between them is the real return. Over time, the FD rate has moved in a narrower band (6-9%), while inflation has swung wildly. When inflation spiked in 2013-14, the gap turned negative. Since then, the RBI’s monetary policy has helped keep inflation in check, and the recent collapse in food prices widened the gap to a comfortable 5.3 percentage points. Savers benefit when inflation is low, because nominal FD rates adjust slowly.
Why this chart It visually explains why your FD returns feel either good or bad in different periods.
How to read it Two lines; when the green (FD) line is above the black (inflation) line, savers win.
Watch out The FD rate shown is an average; your specific bank may offer higher or lower rates.
How the RBI fights inflation: the repo rate
The RBI’s repo rate was 5.3% in May 2026. By raising this rate, the central bank makes borrowing costlier, which cools demand and eventually dampens inflation. The chart shows how the repo rate and CPI inflation often move in opposite directions: when inflation fell to 1.3%, the RBI cut the repo rate to stimulate growth.
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How the RBI fights inflation: the repo rate
The repo rate was cut to 5.25% in May 2026 as inflation collapsed to 1.3%.
%
RBI repo rateCPI inflation
RBI repo rate5.3%CPI inflation1.3%
About this chart
This chart overlays the RBI’s policy repo rate and CPI inflation from 2001 onwards. The repo rate is the main tool to control inflation: raising it cools demand, lowering it stimulates growth. The chart shows that when inflation spiked (e.g., 2010, 2013), the repo rate was raised with a lag. In 2025-26, as inflation plunged, the RBI cut the repo rate to boost the economy. The inverse relationship is clear: high inflation leads to high repo rates, and vice versa. This is the mechanism that eventually feeds into your loan and deposit rates.
Why this chart It explains why the RBI’s actions matter for your monthly budget.
How to read it Two lines; when the black (inflation) line goes up, the green (repo) line tends to follow after some time.
Watch out The repo rate is not directly the rate you pay on your loan; it is the rate at which banks borrow from the RBI.
From the repo rate to your loan EMI
The bank lending rate was 9.0% in April 2026, down from a high of 12.5% in 2012. The transmission from repo to lending rate is not instant, but over time, when the repo rate falls, your home loan EMI should come down, though the full benefit takes months to pass through.
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From the repo rate to your loan EMI
Bank lending rate fell from 12.5% in 2012 to 9.0% in April 2026, tracking the repo rate.
%
RBI repo rateBank lending rate
About this chart
This chart compares the repo rate and the weighted average lending rate of scheduled commercial banks. The lending rate moves in step with the repo rate, but with a lag and a spread. In recent years, as the repo rate was cut from 6.5% to 5.25%, the lending rate fell from around 10% to 9%. This transmission is important for borrowers: a lower repo means lower EMIs on floating-rate home loans. However, the full transmission can take months, and banks often adjust deposit rates faster than lending rates.
Why this chart It shows the direct link between monetary policy and your loan costs.
How to read it Two lines; the gap between them is the bank’s margin. When the repo rate falls, the lending rate should follow.
Watch out Your individual loan rate may differ because of credit risk and other factors.
Town and country feel it differently
Rural inflation was 0.8% in December 2025, urban 2.0%, and combined 1.3%. The divergence reflects different spending patterns: rural baskets have more food, which was deflationary, while urban baskets have more services.
Chart
Town and country feel it differently
Rural inflation was 0.8% in December 2025, urban 2.0%, and combined 1.3%.
% YoY
Urban2.0%Combined1.3%Rural0.8%
About this chart
This chart plots rural, urban, and combined CPI inflation since 2012. Rural and urban inflation usually move together, but there are temporary divergences. In December 2025, rural inflation was lower because food, which has a higher weight in rural areas, was deflationary. Urban areas, with a larger services share, saw slightly higher inflation. These differences mean that a single national number does not fully capture the price experience across India’s diverse regions. The combined figure, which is the weighted average, is the official headline.
Why this chart It acknowledges that inflation is not the same for every Indian; your location matters.
How to read it Three lines; look for periods where rural and urban lines separate.
Watch out Rural inflation being lower does not necessarily mean rural households are better off; their incomes may also be growing differently.
Food inflation hits the village harder
Rural food inflation was -2.3%, urban -1.1%. When food prices do rise, however, they hit rural households harder because food takes a bigger share of their budget. Right now, both are negative, giving some relief.
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Food inflation hits the village harder
Rural food inflation was -2.3% in December 2025, urban -1.1%, both negative but rural more deflationary.
% YoY
Rural foodUrban food
About this chart
This chart focuses on food and beverage inflation in rural and urban areas. When food prices rise, rural households suffer more because food constitutes a larger share of their total expenditure. Conversely, when food prices fall, as they did in late 2025, rural areas benefit more. The chart shows that rural food inflation tends to be more volatile, reflecting greater sensitivity to local agricultural conditions. In December 2025, both were negative, giving relief to households, especially in rural India.
Why this chart It explains why food inflation is a political hot potato: it affects the masses directly and distinctly.
How to read it Two lines; the one that spikes higher during food crises is usually rural.
Watch out Even if food inflation is negative, it doesn’t mean all food items are cheap; it’s compared to a year ago.
The wholesale pipeline: where prices start
Wholesale inflation in April 2026 was 8.3%, with primary articles at 9.2%, fuel and power at 24.7%, and manufactured products at 4.6%. These are the upstream pressures that, with a lag, can filter into retail prices. The sharp spike in fuel WPI is a warning sign for future CPI energy costs.
Inflation in India is not one number but a collection of interconnected pressures. It is driven by global commodity cycles, monsoons, monetary policy, and shifting household spending. For the average family, the key insight is that the headline 1.3% in December 2025 was unusually benign, but underlying core inflation remains near 4.6%, and the services you cannot avoid, education, health, rent, continue to compound. Your personal inflation rate almost certainly differs from the CPI, and that is what shapes your sense that ‘everything is getting more expensive’. The data also shows that the best long-term defence is not a fixed deposit alone, but assets that grow faster than the erosion of the rupee, like gold, and perhaps equity. And that is exactly what Indian households have been doing.
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The wholesale pipeline: where prices start
WPI fuel and power inflation shot up to 24.7% in April 2026, signalling potential future consumer price rises.
% YoY
Primary articlesFuel & powerManufactured products
About this chart
This chart breaks down wholesale inflation into primary articles, fuel and power, and manufactured products. Primary articles (food, minerals) were up 9.2%, fuel and power 24.7%, and manufactured goods 4.6% in April 2026. These are the costs that producers face, which may eventually be passed on to consumers. The fuel spike is particularly worrying because it feeds into transport and electricity, which affect almost every product. WPI is more globally exposed, so movements in crude oil and commodity prices show up here first.
Why this chart It acts as an early warning system for the inflation that households may experience in the coming months.
How to read it Three lines; look at the black fuel-and-power line: when it shoots up, retail energy prices often follow.
Watch out High WPI does not guarantee high CPI; transmission is incomplete and depends on demand and competition.
Tell me what this means, bro
Okay, but what does this actually mean for my wallet, macha?
Inflation is not one thing moving at one speed. It’s like a cricket scoreboard where every batsman is at a different run rate. In December 2025, the headline number said prices were only 1.3% higher than a year ago, that sounds calm. But vegetables had actually gotten 18.5% cheaper, while gold shot up 68.7% and personal care items jumped 28.2%. So your experience depends on what you buy. If you’re a salaried person in a city, tuition fees and doctor bills are climbing steadily. If you’re in a village, food prices matter most, and right now they’re down, which helps. The real trick is that inflation compounds quietly, even low annual rates shrink a rupee by half over a decade. So the answer to ‘why is everything expensive’ is: it isn’t, not uniformly, but what does rise tends to stay risen, and the things you can’t avoid, health, education, the gas cylinder, keep pushing the cart uphill.
Inflation is a silent tax that erodes your money differently depending on your life: understand your personal basket, not just the headline.॥
Plain English concepts
CPI (Consumer Price Index)
Imagine you take a photo of a typical Indian family’s monthly shopping cart, food, rent, bus fare, school fees, electricity bill, medicine. CPI is the price tag on that cart in a given month compared to what it cost in a base year (here 2012). It is not the price of any one thing; it is a weighted average, where items you spend more on (like food) pull the number more than items you spend little on (like soap). It measures what consumers pay out of pocket.
This page uses the CPI to show how your purchasing power is eroding, which parts of your spending are getting pricier, and how that differs between rural and urban India.
Core inflation
Think of a fruit basket from which you remove the most squishy, unpredictable items, say, mangoes and coconuts, and keep only the sturdy apples. Core inflation does that with the CPI: it strips out food and fuel prices because they swing wildly due to monsoons, global oil prices, or supply gluts. What remains, rent, tuition fees, medical bills, changes more slowly and tells you about the deep, sticky price trends in the economy.
In December 2025, headline inflation was 1.3% because food prices fell, but core was 4.6%. So the underlying trend was still pushing prices up, even if vegetables gave temporary relief.
Purchasing power
If a cup of chai cost ₹10 in 2012 and ₹20 today, your ₹100 note from 2012 now buys only five cups instead of ten, its purchasing power is half. This is not about the note being torn; it is about prices rising. Purchasing power is the inverse of the price level: when the CPI doubles, your rupee buys half as much as before.
The first chart shows that ₹100 from 2012 buys only ₹51 worth of goods today. That is a direct measure of how inflation has shrunk the value of money in your wallet.
Real return
Suppose your bank fixed deposit pays 7% interest a year. If inflation is 5%, your money grows only 2% in real terms, that is, after adjusting for the rising cost of things you buy. If inflation is 8%, your real return is -1%, meaning even though your balance increases, you can actually buy less than before. Real return = nominal interest rate minus inflation rate.
The FD real return chart shows that in December 2025, savers were getting a positive real return of 4.46%, but in 2013 it was negative. This explains why Indian families often choose gold or real estate over bank deposits.
WPI (Wholesale Price Index)
CPI is at the shop; WPI is at the factory gate or mandi. It measures what producers and traders pay before things reach the retail shelf. WPI covers items like steel, crude oil, grains in bulk, and electricity. It does not include services, and its weights are based on production, not consumer spending. So a spike in WPI fuel does not immediately show up in your petrol bill, but it is a signal of where retail prices might go.
In April 2026, WPI inflation was 8.3% while CPI was 1.3%. The gap warns that pipeline pressures could feed into consumer prices later.
Headline vs core inflation
Headline inflation is the all-in number you see in the news. Core inflation is the same number after removing the noisy parts, food and fuel. Imagine you are judging the speed of a train, but a monkey keeps pulling the emergency brake. Headline speed shows that monkey’s impact; core speed shows how fast the engine is actually going. Central banks like the RBI watch core closely to set interest rates.
The core vs headline chart shows that in December 2025, the monkey (food deflation) had pulled the brake, but the train (services) was still chugging at 4.6%.
The data behind this article
Built from 116 data series across 4 sources, with data through 2026.
All figures use the 2012 CPI basket unless otherwise noted; the 2024 basket revision is not yet reflected in headline CPI series, so historical comparisons should be interpreted with caution.
Core inflation is estimated by IndiaDataHub and may differ slightly from official RBI estimates.
Real FD return is computed as the difference between average term deposit rate and CPI inflation, before taxes. Actual post-tax returns for an individual will be lower.
WPI and CPI are not directly comparable due to different baskets and methodologies.
International CPI data from the World Bank may have methodological differences across countries, affecting strict comparability.
Rural and urban CPI weights are based on NSSO consumption surveys and may not perfectly represent all sub-populations.
Bhuvanesh. “Why does everything keep getting more expensive?” This Indian Life, October 2026. https://thisindianlife.today/articles/why-does-everything-keep-getting-more-expensive/
BibTeX
@misc{tilife-whydoeseverythingkeepgettingmoreexpensive,
author = {Bhuvanesh},
title = {Why does everything keep getting more expensive?},
year = {2026},
publisher = {This Indian Life},
url = {https://thisindianlife.today/articles/why-does-everything-keep-getting-more-expensive/}
}
APA
Bhuvanesh. (2026). Why does everything keep getting more expensive? This Indian Life. https://thisindianlife.today/articles/why-does-everything-keep-getting-more-expensive/