Inflation accelerates faster in poorer states, even as richer states record higher rates

Inflation has accelerated more sharply in India's lower-income states over the past six months, even as several wealthier states continue to record higher inflation rates, according to a Moneycontrol analysis.

Among 18 states and Union Territories with comparable income data, the nine lower-income regions witnessed an average increase of 2.84 percentage points in inflation between April and October, compared with 2.38 percentage points for the nine higher-income regions.

However, inflation in October averaged 6.08 percent in the higher-income group, compared with 5.95 percent in the lower-income group.

Chhattisgarh recorded the sharpest acceleration, with inflation climbing 4.22 percentage points from 1.77 percent in April to 5.99 percent in October.

Odisha followed with an increase of 3.73 percentage points to 7.17 percent, while Madhya Pradesh witnessed a 3.52-percentage-point rise to 7.19 percent.

Jharkhand, Bihar and Uttar Pradesh also experienced substantial increases of 3.02, 2.97 and 2.88 percentage points, respectively.

In contrast, wealthier states such as Telangana recorded a relatively modest increase of 1.45 percentage points, although its October inflation rate remained elevated at 7.26 percent.

Tamil Nadu and Karnataka reported inflation of 7.29 percent and 7.07 percent, respectively, with increases of 3.11 and 3.07 percentage points since April.

The disparity is significant given differences in purchasing power. Per capita income in Madhya Pradesh stood at approximately Rs 1.53 lakh in 2024-25, compared with Rs 3.62 lakh in Tamil Nadu and Rs 3.88 lakh in Telangana.

Faster inflation acceleration in poorer states could put additional pressure on household budgets, where financial buffers to absorb rising expenses may be more limited.

Nationally, retail inflation climbed to 6.09 percent in October from 3.48 percent in April, breaching the Reserve Bank of India's upper tolerance limit of 6 percent.