Huge drop in inflation in July 2025: Big relief to the common man

India’s retail inflation hits 8-year low at 1.55% in July 2025, with food prices entering negative zone (-1.76%). Rural-urban areas see relief as essential commodity costs drop. Kerala records lowest inflation (8.89%). Experts credit effective monetary policies for this economic turnaround.

New Delhi: The inflation rate in India registered a historic decline in July 2025, which has brought great relief to the general public. Retail inflation has come down to just 1.55%, which is the lowest level in the last 8 years. This decline is mainly due to the reduction in food prices. According to government data, inflation has been seen so low for the first time since June 2017. The rate was 2.1% in June 2025, which fell by 55 basis points to 1.55% in July.

Huge drop in food inflation

Food inflation has also come down tremendously. In July 2025, it reached the negative zone of -1.76%, which is the lowest level since January 2019. The fall in prices of essential commodities like pulses, vegetables, cereals, eggs, and sugar has played an important role in this improvement. Food inflation has declined by 75 basis points as compared to June, which has reduced the kitchen budget in every household.

Relief in both rural and urban areas

This decline in inflation has been seen in both rural and urban areas. Inflation in rural areas fell from 1.72% in June to 1.18% in July, while in urban areas it came down from 2.56% to 2.05%. This means that people living in both villages and cities have had to reduce spending on everyday needs.

Inflation situation in other sectors

Housing: Inflation related to housing remains stable at 3.17%.

Education: There has been a slight decline in the cost of education, which has come down from 4.37% to 4%.

Health Services: However, inflation in health services has increased to 4.57%, which may be a matter of concern.

Fuel and Light: There has been a slight increase in the prices of petrol-diesel and electricity, taking the inflation in this sector to 2.67%.

Which states have the lowest inflation?

Kerala had the lowest inflation rate (8.89%), while states like Jammu and Kashmir (3.77%), Punjab (3.53%), Karnataka (2.73%), and Maharashtra (2.28%) also had inflation under control. Prices also declined in the transport and communication sector, where inflation came down from 3.90% to 2.12%.

Will this improvement continue?

This decline in inflation in July 2025 is good news for the common people. If this trend continues further, then further improvement can be seen in financial stability and the market. This is also an indication that the economic policies of the government and the Reserve Bank are working in the right direction. However, there is a need to keep an eye on the rising costs in sectors like health and fuel so that the relief being provided to the common man continues.