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Data from Statistics ministry shows that Kerala recorded the highest monthly inflation in February 2025 at 7.31 per cent, primarily driven by food and services.
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K Ragesh
In FY24-25, States such as Kerala, Bihar, Odisha consistently reported high inflation rates, above the national average, emerging as outliers amid a broader decline in price levels across the country.
The all-India average CPI inflation for the period between April 2024 and April 2025 stood at 4.51 per cent. Kerala recorded the highest 12-month average at 5.88 per cent, followed closely by Bihar (5.79 per cent), Odisha (5.72 per cent), and Chhattisgarh (5.57 per cent).
Businessline’s analysis of the Ministry of Statistics and Programme Implementation (MoSPI) data shows that Kerala recorded the highest monthly inflation in February 2025 at 7.31 per cent, primarily driven by food and services.
According to Anitha Rangan, Economist, Equirus Securities, “Kerala is largely a non-agrarian state. Higher remittances could have had a hand in driving higher inflation. But food prices here have been trending higher”.
In Karnataka, inflation remained above 4 per cent for most of the year, peaking at 6.11 per cent in May 2024. Experts noted that in Karnataka, while inflation cooled temporarily between July and December 2024, it remained above average for the rest of the year
In contrast, Delhi and Telangana consistently recorded the lowest inflation rates. Delhi’s average CPI was 2.35 per cent, while Telangana stood at 3.47 per cent. In fact, Telangana saw inflation fall from 5.68 per cent in April 2024 to just 1.26 per cent by April 2025, the steepest drop among all States.
Rural-urban inflation gaps appeared to shape many of these outcomes. “Where rural inflation is higher than urban, the headline CPI for the State tends to get higher than All-India. The predominant factor in rural inflation being food,” Rangan added.
Other high-inflation states included Haryana (5.08 per cent), Uttar Pradesh (5.08 per cent), and Tamil Nadu (4.54 per cent), all exceeding the national average across the full year.
Meanwhile, Delhi (2.35 per cent), Gujarat (4.26 per cent), and Jharkhand (3.65 per cent) managed to stay consistently below average throughout the year.
Vivek Iyer, Partner, Grant Thornton Bharat, pointed to structural causes for state-wise inflation differences, “Food and fuel are the key drivers of CPI inflation, and differences in price points on these items across states result in deviations across states. Supply chain costs have a significant bearing on these differences”.
As India continues to grapple with inflation amid varied State-level dynamics, experts stress the importance of targeted intervention, especially in food supply chains, to reduce volatility and bring more uniformity to the price experience across the country.
Published on May 20, 2025
This article first appeared on The Hindu Business Line
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