Telangana has officially entered deflation territory, a rare and significant economic event where prices fall instead of rise. According to data released by the Union Ministry of Statistics and Programme Implementation (MoSPI) on July 15, the state recorded a negative inflation rate of -0.93 percent in June 2025, compared to the same month last year.
This makes Telangana the only state in India with year-on-year deflation in June. The national average, by contrast, stood at 2.1 percent, pointing out just how far the state’s price trends have diverged from the rest of the country.
Breaking down the numbers
Rural Telangana: Inflation stood at -1.54 percent, compared to the national rural average of 1.72 percent.
Urban Telangana: Recorded -0.45 percent, against India’s urban average of 2.56 percent.
Andhra Pradesh, while not in deflation, also posted extremely low inflation: 0.0 percent overall, with -0.55 percent rural and 1.06 percent urban inflation.
This marks a dramatic turnaround for Telangana. Under the previous BRS government, the state battled double-digit inflation between 2020 and 2023, with prices often rising more than 10 percent annually. The public faced soaring costs across essentials like food, fuel, and services.
However, since the Congress government took office in December 2023, there has been a steady drop in inflation:
February 2025: 1.31 percent
March: 1.06 percent
April: 1.26 percent
May: 0.55 percent
June: -0.93 percent
This five-month trend shows a consistent and sharp deceleration in price rise, culminating in outright deflation.
Chief Minister A Revanth Reddy has credited a mix of welfare-driven policies and better economic management. When Telangana recorded the lowest inflation in April, he called it evidence of 'transformative and people-centric governance.'
Some of the major schemes the government highlights include:
Free bus travel for women
LPG cylinders at Rs 500
200 units of free electricity
Rs 10 lakh health insurance under Rajiv Arogyasri
Free fine rice for ration card holders
The state argues, as cited by Deccan Herald, that these schemes have eased household budgets and helped bring down overall consumption-led inflation.
Economists, however, tell Deccan Herald that other factors, such as reduced food prices and controlled power tariffs, are likely playing a role as well.
Is deflation good news?
Not always. While falling prices seem like a relief for consumers, prolonged deflation can indicate slowing demand, reduced investments, and economic stagnation. For now, however, Telangana’s situation appears to be driven more by targeted cost-cutting measures and policy intervention, rather than a broader economic slump.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
