India's consumer price index (CPI) or retail inflation stood at 5.07% in the month of January 2018, lower from 5.21% in December 2017. 

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However, the CPI was higher if compared with 3.17% of the corresponding month in the previous year. 

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The consumer food price index (CFPI) stood at 4.70% during the month, lower compared to 4.96% of December 2017, but higher from 0.61% of January 2018. 

The Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation, has revised the Base Year of the Consumer Price Index (CPI) from 2010=100 to 2012=100 with effect from the release of indices for the month of January 2015. 

Price data are collected from selected towns by the Field Operations Division of NSSO and from selected villages by the Department of Posts. Price data are received through web portals, maintained by the National Informatics Centre.

Major indicators of CPI were all positive with food & beverages at 4.58%, pan, tobacco & intoxicants at 7.58%, clothing & footwear at 4.94%, housing at 8.33%, fuel & light at 7.73% and miscellaneous at 3.78%.

Housing inflation continues to rise.

RBI believes that uptick in CPI will rise further by end of FY18, which is why it raised the target for inflation to 5.1% in Q4, including the HRA impact, during the last monetary policy of this fiscal.
 
During February policy, RBI stated that the December bi-monthly resolution projected inflation in the range of 4.3-4.7% in the second half of 2017-18, including the impact of increase in HRA. In terms of actual outcomes, headline inflation averaged 4.6% in Q3, driven primarily by an unusual pick-up in food prices in November.
 
RBI said, "Though prices eased in December, the winter seasonal food price moderation was less than usual. Domestic pump prices of petrol and diesel rose sharply in January, reflecting lagged pass-through of the past increases in international crude oil prices."

Analysts also believe that CPI will stay above 5%-level. 

Kapil Gupta, Prateek Parekh and Akshay Gattani, analysts at Edelweiss Financial Services, said, "In ensuing months, we expect CPI to remain over 5% on low base effect, although deflation in vegetables could nullify some of the impact of low base. What also needs to be tracked is any push to the domestic prices of pulses, oilseeds, etc., because of hike in import duties by the government in several agri-commodities."

In Stewart Mackertich's views, although RBI has given a hawkish outlook in inflation and indicates a higher rate scenario, we believe correction in crude oil prices and stability of the INR may not lead to high inflation. However, commitment of Government to MSP for Kharif crop raises chances of higher prices hence high inflation. 
 
Mackertich, however, expected that India’s CPI for the month of January 2018 at 5.10% against a prior number of 5.21%.