Explained: What’s causing high inflation and where?

West Bengal, Madhya Pradesh and Telangana are the worst hit by inflation

Among urban areas, consumers in Telangana, Gujarat and Maharashtra faced the highest inflation. (PTI)

India’s retail inflation rose by 7.79 per cent in April, according to the latest data released by the Ministry of Statistics and Programme Implementation. Inflation in food items rose by even higher — 8.38 per cent in April — according to the MoSPI’s Consumer Food Price Index (see Table 1 below).

However, the biggest jump was registered in fuel prices, which rose by almost 11 per cent in April. This is a direct impact of the higher crude oil prices being passed through to the consumers in the wake of the war in Ukraine.

Table 1: What is causing inflation: Composition of Consumer Price Index

Among the states, West Bengal, Madhya Pradesh and Telangana faced the highest levels of overall consumer inflation (see Table 2).

Disaggregated data about the rural and urban areas shows that in four states — West Bengal, Madhya Pradesh, Telangana and Haryana — rural consumers faced a retail inflation of more than 10 per cent.

Among urban areas, consumers in Telangana, Gujarat and Maharashtra faced the highest inflation.

Table 2: Inflation rates in state/UTs

Retail inflation essentially refers to the rate at which the general price level went up in a particular month (April in the current instance) over what it was in the same month a year ago. The change is expressed as a percentage. Retail inflation also refers to the prices faced by consumers, and not the ones prevailing in the wholesale market.

The retail inflation level is the most important measure of inflation in India because it is this inflation rate that India’s central Bank, the RBI, targets to maintain price stability. According to the law, the RBI is supposed to keep overall retail inflation at the 4% level. However, the law allows RBI a leeway of two percentage points. In other words, in a particular month, retail inflation can vary between 2% and 6%.

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Also in Explained | The cause and effect of rising inflation

However, since the start of 2022, retail inflation has been trending above the 6% mark and there is a good chance that it may stay above the 6% mark for the first 9 months of the year. If that happens, the RBI will have to explain the slippage to the Parliament.

Udit Misra

Udit Misra is Senior Associate Editor at The Indian Express. Misra has reported on the Indian economy and policy landscape for the past two decades. He holds a Master’s degree in Economics from the Delhi School of Economics and is a Chevening South Asia Journalism Fellow from the University of Westminster. Misra is known for explanatory journalism and is a trusted voice among readers not just for simplifying complex economic concepts but also making sense of economic news both in India and abroad. Professional Focus He writes three regular columns for the publication. ExplainSpeaking: A weekly explanatory column that answers the most important questions surrounding the economic and policy developments. GDP (Graphs, Data, Perspectives): Another weekly column that uses interesting charts and data to provide perspective on an issue dominating the news during the week. Book, Line & Thinker: A fortnightly column that for reviewing books, both new and old. Recent Notable Articles (Late 2025) His recent work focuses heavily on the weakening Indian Rupee, the global impact of U.S. economic policy under Donald Trump, and long-term domestic growth projections: Currency and Macroeconomics: "GDP: Anatomy of rupee weakness against the dollar" (Dec 19, 2025) — Investigating why the Rupee remains weak despite India's status as a fast-growing economy. "GDP: Amid the rupee's fall, how investors are shunning the Indian economy" (Dec 5, 2025). "Nobel Prize in Economic Sciences 2025: How the winners explained economic growth" (Oct 13, 2025). Global Geopolitics and Trade: "Has the US already lost to China? Trump's policies and the shifting global order" (Dec 8, 2025). "The Great Sanctions Hack: Why economic sanctions don't work the way we expect" (Nov 23, 2025) — Based on former RBI Governor Urjit Patel's new book. "ExplainSpeaking: How Trump's tariffs have run into an affordability crisis" (Nov 20, 2025). Domestic Policy and Data: "GDP: New labour codes and opportunity for India's weakest states" (Nov 28, 2025). "ExplainSpeaking | Piyush Goyal says India will be a $30 trillion economy in 25 years: Decoding the projections" (Oct 30, 2025) — A critical look at the feasibility of high-growth targets. "GDP: Examining latest GST collections, and where different states stand" (Nov 7, 2025). International Economic Comparisons: "GDP: What ails Germany, world's third-largest economy, and how it could grow" (Nov 14, 2025). "On the loss of Europe's competitive edge" (Oct 17, 2025). Signature Style Udit Misra is known his calm, data-driven, explanation-first economics journalism. He avoids ideological posturing, and writes with the aim of raising the standard of public discourse by providing readers with clarity and understanding of the ground realities. You can follow him on X (formerly Twitter) at @ieuditmisra ... Read More