From Free Grains to Lower Rates: How India’s Fighting Inflation

Inflation affects the daily lives of all citizens by increasing the prices of goods and services. To ease this burden, the Indian government and the Reserve Bank of India (RBI) have taken several important steps over the last few years. These measures include both monetary policies by the RBI and fiscal actions by the government.

Inflation Trends in Recent Quarters

According to official data, inflation has reduced steadily over the last three quarters:

Source: MoSPI and Office of Economic Adviser (DPIIT)

Consumer Price Index (CPI) inflation is the main focus of the RBI’s inflation-targeting policy. The RBI aims to keep CPI inflation at 4%, with a tolerance of ±2%. Over the past three quarters, CPI has remained well within this target range.

Steps Taken by the Government

The Government of India has taken many steps to reduce inflation and protect the poor and middle class:

• Increased buffer stocks of essential food items
• Sold food grains in the open market to control prices
• Allowed imports and restricted exports during shortages
• Put stock limits on key items to improve supply
• Offered subsidised food under the Bharat brand
• Provided free food grains to 81 crore people under the National Food Security Act
• Increased tax exemption to boost disposable income for individuals

RBI’s Monetary Policy Moves

To control inflation, the RBI raised the repo rate from 4% to 6.5% between May 2022 and February 2023. It kept the rate steady until January 2025. This helped bring CPI inflation down from 5.4% in 2023-24 to 4.6% in 2024-25—the lowest in six years. Inflation further dropped to 2.1% in June 2025. In response, the RBI cut the repo rate by 100 basis points since February 2025 to support economic growth.

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Conclusion

Through a mix of smart government actions and careful monetary policy by the RBI, inflation in India has come down sharply. These efforts aim to protect common citizens and ensure stable and sustained economic growth.

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