December retail inflation figures will be released today: It may increase between 1.6% to 1.7%, in November it was at 0.71%.

Today i.e. on January 12, retail inflation (CPI) figures for the month of December will be released. According to experts, retail inflation is likely to increase to between 1.6% to 1.7% in December 2025. Earlier in November it was at 0.71%. Whereas in October it was at 0.25%, which was the lowest level in 14 years.

Retail inflation was at the lowest level in 14 years in October Retail inflation had fallen to a record low of 0.25% in October. The reason for this was the decrease in the prices of food items. This was the lowest inflation so far in the current CPI series. That is, this was the lowest level of about 14 years. Earlier in September it was at 1.44%.

The current series of CPI in India is based on the base year of 2012. Meaning, the prices of 2012 are taken as 100 and compared. Earlier there were series of 2010 or 1993-94, but they are updated with time so that the figures remain correct. The base year changes in every new CPI series.

CPI series i.e. Consumer Price Index Series. This is the government’s simple way of measuring inflation. In simple words, it tells how expensive or cheap everyday items like milk, vegetables, petrol are becoming. The figure comes in % by comparing with the base year.

What is base year?

Base year is the year in which prices are considered as base. That is, the average price of things of the same year is given a value of 100. Then, the prices of other years are compared with this base year. This shows how much inflation has increased or decreased.

Example: Suppose 2020 is the base year. That year one kg tomato was priced at ₹50. Now in 2025 it will become ₹80. So inflation = (80 – 50) / 50 × 100 = 60% increase. The same formula is used in CPI, but it applies to the entire market.

How is the base year chosen and how does it work?

• The government usually chooses a new base year every 5-10 years.
• This is a year which is normal, neither there is much drought, nor epidemic, nor much inflation.

How does inflation increase and decrease? The rise and fall of inflation depends on the demand and supply of the product. If people have more money they will buy more things. Buying more things will increase the demand for things and if the supply is not as per the demand, the price of these things will increase. Whereas if demand is less and supply is more then inflation will be less.

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