Page 24 - Policy Economic Report -August 2026

POLICY AND ECONOMIC
OIL & GAS MARKET

combined level. Inflation in actual rental payments made for housing was 2.11 per cent, while electricity,
gas and other fuels recorded inflation of 2.02 per cent.

Figure 9: Inflation Rates Across Major CPI Groups (June 2026)

Source: Ministry of Statistics and Programme Implementation - National Statistics Office

Among other major expenditure categories, Restaurants and Accommodation Services recorded
relatively high inflation of 7.72 per cent, while Transport inflation stood at 4.43 per cent and Clothing and
Footwear at 3.38 per cent. Education Services recorded inflation of 3.64 per cent,
while Health and Information and Communication remained comparatively moderate at 1.34 per
cent and 0.63 per cent, respectively. The highest inflation among the major divisions was recorded
in Personal Care, Social Protection and Miscellaneous Goods and Services at 14.77 per cent.

At the state level, inflation remained uneven across major states. Among states with populations above
50 lakh, Andhra Pradesh recorded the highest combined CPI inflation at 5.72 per cent, followed by Tamil
Nadu at 5.44 per cent, Madhya Pradesh at 4.91 per cent and Karnataka at 4.89 per cent. Telangana
recorded combined CPI inflation of 6.32 per cent, the highest among the states shown in the release.

Overall, India's inflation environment remained relatively contained but showed signs of renewed food-
price pressure in July. The modest increase in headline CPI inflation was accompanied by a more
pronounced rise in food inflation, while housing and several services-related categories remained
comparatively stable. The divergence between rural and urban inflation also persisted, with rural inflation
remaining higher than urban inflation. Going forward, food-price movements, particularly in key
vegetables and other perishables, will remain important for the near-term inflation trajectory, while
housing, transport and energy-related costs will continue to influence broader consumer prices.

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