<h1>Government and RBI cut inflation from 5.6% to 2.7% through coordinated monetary fiscal measures under RBI Act 1934</h1> Government and RBI implemented coordinated monetary and fiscal measures to control inflation. CPI inflation rates decreased from 5.6% in Q3:2024-25 to 2.7% in Q1:2025-26, while WPI inflation fell from 2.5% to 0.4% over the same period. RBI maintains flexible inflation targeting with 4% target and +/-2% tolerance band under the RBI Act, 1934. The central bank raised repo rates by 250 basis points between May 2022 and February 2023, maintaining at 6.5% through January 2025, then cutting by 100 basis points. Government measures included augmenting buffer stocks, strategic grain sales, import facilitation, stock limits implementation, subsidized retail sales under Bharat brand, free food grain distribution to 81 crore beneficiaries, and income tax exemptions up to Rs. 12 lakh. Average retail inflation dropped from 5.4% in 2023-24 to 4.6% in 2024-25, reaching 2.1% by June 2025.