India’s retail inflation easing to a five-month low of 4.31 per cent in January presents a significant moment for economic policy. With food prices moderating and inflation coming in lower than expected, the latest figures offer a rare balance between price stability and economic stimulus. However, the moment demands careful handling. While it creates space for further rate cuts and policy interventions, risks remain on the horizon. A key driver for the softening inflation is the moderation in food prices.

Vegetables, which saw a steep rise of 26.6 per cent in December, grew at a much slower pace of 11.35 per cent in January. Pulses and cereals showed a downward trend in price growth. This can largely be attributed to improved winter harvests, which have stabilised food supply. However, the respite could be short-lived. The expected unseasonably warm temperatures in March could impact key crops like........

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