The combined inflation (rural and urban) fell to 3.65% in August 2024, compared to 6.83% in August 2023. However, it has increased by 110 basis points when compared to the previous month’s 3.54%.

This was the second time in nearly five years that overall retail inflation fell below the Reserve Bank of India’s 4% inflation target. The last time was July 2024.

The RBI’s inflation target is 4% with a tolerance band of +/- 2 percentage points, meaning that the target is within the range of 2% to 6%.

What were the urban and rural inflation rates in India?

Urban inflation fell to 3.14% in August 2024, compared to 6.59% in August 2023.

Rural inflation fell to 4.16% in August 2024, compared to 7.02% in August 2023.