Air Passenger Service Inflation Soars Nearly 32% In June Quarter, Railway Price Rise Holds Steady At 3.5%

New Delhi: Air passenger services recorded annual price inflation of nearly 32 percent in the June quarter, the steepest increase among seven service sectors covered by the government’s producer price data.

The provisional Service Producer Price Indices (PPI) for the first quarter of FY27 covered banking, securities transactions, insurance, pension management, railways, air passenger services and telecom. The data were released by the Commerce and Industry Ministry.

Air Fares Lead Increases

The Air Passenger Service Price Index rose 31.94 percent year-on-year. However, no sequential comparison was provided because the reference period for this sector was fixed as FY26.

Railway passenger service inflation stood at 3.50 percent, unchanged from the March quarter. Inflation in banking service contribution increased to 6.90 percent from 3.30 percent in the preceding quarter.

Mixed Movement Across Services

The Banking Service Price Index recorded deflation of 3.35 percent, compared with a 4.10 percent contraction in the March quarter. Securities transaction services posted deflation of 1.32 percent, reversing the previous quarter’s inflation of 0.55 percent.

Pension fund management services registered inflation of 5.20 percent, against deflation of 0.76 percent earlier. Insurance inflation edged up to 0.98 percent from 0.68 percent, while telecom inflation eased to 0.72 percent from 0.99 percent.

The government plans to add sectors to the Service PPI framework, widening its coverage of price changes across the economy.

PPI To Replace WPI

India released its maiden PPI data for goods and services in June. The framework is intended to measure price movements from the producer’s perspective and gradually replace Wholesale Price Index-based inflation figures over the next five years.

The transition follows recommendations made by a working group headed by former NITI Aayog member Ramesh Chand. The panel also recommended changing the base year from 2011-12 to 2022-23.

According to the panel, PPI offers a more accurate assessment of prices received by producers. It is also considered more suitable for national accounts, GDP compilation and measuring real value addition.