Economic Survey: Inflation Not a Concern, GST Cuts Drive Price Drops

• The Economic Survey 2025-26 states that inflation is likely to remain benign in the coming financial year due to favorable supply-side conditions and GST rate rationalization.
• India's inflation averaged 1.3 percent in December, staying below RBI's 2-6 percent band for the fourth consecutive month, with food deflation persisting for seven months.
• A new CPI series with a 2024 base and updated consumption basket will be introduced from February 12, assigning higher weight to non-food components to contain food-related volatility.
• Inflation is projected to average 2 percent this fiscal year and may not exceed 4 percent in the upcoming fiscal year, according to IMF data and RBI expectations.
• Economists and CXOs are less concerned about inflation, with global uncertainty now the primary concern, and over two-thirds of respondents expect RBI to cut rates in FY27.

Why It Matters: Economic Survey indicates benign inflation ahead, supported by GST cuts and favorable supply conditions.