A key highlight of the Survey was the sharp decline in food inflation, which entered deflationary territory from June 2025. Core inflation remained relatively stable, with a modest uptick attributed largely to rising prices of precious metals amid global uncertainty. The Economic Survey observed that unlike in 2023 and 2024, when rural inflation exceeded urban inflation, rural inflation declined in 2025 and remained lower than urban inflation, reflecting the sharp fall in food prices and offering relief to rural households. Further, the state-level data showed that inflation remained within the Reserve Bank of India’s 2-6 per cent tolerance band in most states, with only Kerala and Lakshadweep breaching the upper limit. Variations across states were largely driven by local price movements rather than persistent inflationary pressures, the Survey noted.