According to the central bank's State of the Economy report, the RBI has reduced core inflation, which is mostly caused by periodic increases in food prices, but it has not yet reached its target inflation rate of 4%.

The article stated that January and February inflation data indicate that the wintertime decrease in vegetable costs was transient. Cereal costs have continued to rise while the prices of meat and fish have increased.

 "Fuel costs are still deflating, and this may become more noticeable in March as a result of the LPG price decrease. Overall, the momentum of headline inflation became positive in February 2024, counteracting a positive base impact. In order to guide inflation toward the target while maintaining the pace of development, monetary policy must continue to be in a risk-minimization mode, the paper stated.

The research states that variations in per capita expenditure patterns are probably going to have an effect on inflation. Between 2011–12 and 2022–23, the percentage of food items in the monthly per capita consumption expenditure (MPCE) decreased, with cereals experiencing the most decline: from 52.9% to 47.5% in rural regions and from 42.6% to 39.7% in urban areas. However, the proportion of high-value foods, such fruits, milk, and prepared meals, has increased within the food chain.

"These changes could impact the measurement of retail inflation because the shares of consumption form the weights for calculating CPI (the current CPI derives its weight from the 2011–12 HCES)," the paper stated.

The development of some of the most resilient economies has slowed, and high-frequency indications suggest that the global economy will continue to level off in the coming years. According to the analysis, India's real GDP growth reached a six-quarter high in Q3 2023–2024 owing to solid indirect taxes, decreased subsidies, and strong momentum.