Editorial     

Published: August 31, 2026
Updated: August 31, 2026

Govt slumbers while CPI keeps soaring: Inflation needs tackling on war footing

While global flashpoints like the Russia-Ukraine and the US-Iran conflicts continue, political grandstanding by both the ruling and opposition parties has pushed the pain points of the Indian economy to the backburner and has exacerbated the frustration of the aam aadmi. While there are macro-economic problems aplenty, what directly affects the common man is the monster of inflation. With prices of essential as well as semi-essential commodities shooting up, the kitchen budgets of low- and middle-income people have gone askew and millions are finding it an uphill task to make ends meet.

India’s annual retail inflation rate based on the consumer price index (CPI) rose to 5.2% in July 2026, as compared to 3.93% in May 2026 and 4.38% in June 2026. If current market trends are any guide, the inflationary price spiral will scale up further, adding to the hardships of millions of Indians.

The primary drivers of this inflationary price spiral are volatile wholesale and retail food, energy and fuel prices.

The consumer food price index (CFPI) rose to 5.24%-5.52% in July, with perishables like onions and tomatoes experiencing sharp spikes due to uneven monsoon conditions and el Niño-linked rainfall variability. Sugar prices too have skyrocketed.

The US-Iran conflict in the Middle East (mainly the US-Iran war) had earlier forced state-run oil companies to hike gasoline and diesel prices. Though crude oil prices have experienced some volatility near the $ 80/90 per barrel mark, transport inflation ticked up to 4.43% in July 2026.

Meanwhile, wholesale price index inflation climbed up significantly, hovering close to 10% in July 2026, driven by manufacturing and power inputs. This high wholesale baseline is creating a deleterious effect on retail prices.

Unfortunately, the government does not seem to be fully seized of the inflationary price spiral issue. On the other hand, if the weather pundit’s fears and a likely el Niño impact are any indication, more difficult days are ahead for the long-suffering public. Leading milk producers like Amul and Mother Dairy have recently raised their milk prices. The government itself has raised the prices of LPG and PNG. Further, it is reliably learnt that FMCG companies are finalising plans to raise prices of their personal care products. And following price hikes in cereals, milk and sugar, it is now the turn of fruits and vegetables.

One fails to understand why New Delhi is not taking emergency measures on a vital issue of public interest like inflation. The bloody US-Iran and Russia-Ukraine conflicts have cast their gloomy shadow over the Indian economy, even though we are geographically far removed from these war zones. It is high time that the government takes remedial measures on a war footing, or else the country’s economic growth will face a setback and the ripple effects of such a scenario could even extend to future generations of the country.