Overview

• The BoB Essential Commodity Index fell 1% year on year in August, its fourth straight month of deflation, with early September tracking at -0.9% year on year.
• Onions (-37.5% YoY) and potatoes (-31.5% YoY) led the decline, alongside successive drops across pulses including tur/arhar (-29%).
• The index rose about 1% month on month in August, which BoB characterizes as a seasonal uptick rather than a shift in trend.
• Recent GST rate cuts on FMCG and durable goods are estimated by BoB to lower headline CPI by roughly 55–75 basis points.
• BoB cites improved kharif sowing and supply conditions but flags risks from uneven monsoons in key growing states and sticky edible-oil prices.