The Economic Survey 2025-26 has recorded a decisive cooling of retail inflation across states during the current financial year, even as it cautioned that state-level price pressures continue to show persistence shaped by local factors rather than fleeting shocks.According to the survey, state-level inflation during April-December 2025 broadly tracked the national trend, with an “across-the-board reduction” in prices. Except for Kerala and Lakshadweep, where retail inflation breached the Reserve Bank of India’s upper tolerance limit of 6 per cent, all states and Union Territories remained within the RBI’s 2-6 per cent band or below it. All-India headline inflation stood at 1.72 per cent in this period, sharply lower than 4.63 per cent in 2024-25 and 5.36 per cent in 2023–24.In northern India, Punjab, Haryana, Himachal Pradesh and Jammu & Kashmir reflected this moderation, though each followed a distinct trajectory. Punjab’s inflation eased to 3.27 per cent in April-December 2025-26, down from 4.16 per cent in 2024-25 and 5.53 per cent the year before. The decline places Punjab marginally above the national average but firmly within the RBI’s tolerance band, reflecting easing food and core prices after two years of elevated readings.Haryana recorded one of the sharpest drops among large states. Inflation fell to 1.61 per cent in the current year so far, compared with 5.23 per cent in 2024-25 and a high of 6.60 per cent in 2023-24. The survey’s data show Haryana moving from persistently high inflation to well below the national average within two years, underscoring the impact of cooling commodity prices and improved supply conditions.Himachal Pradesh, a hill state often affected by transport and weather-related costs, recorded inflation of 2.17 per cent during April-December 2025-26, down from 4.04 per cent last year. Over the four-year period covered in the Survey’s table, Himachal Pradesh consistently remained below or close to the all-India average, a pattern that the survey later identified as relatively stable, with price deviations showing persistence but not volatility.Jammu & Kashmir reported inflation of 3.60 per cent in the current year so far, higher than the national average but lower than its own levels of 4.48 per cent in 2024–25 and 6.34 per cent in 2022-23. The survey noted that while far-end and geographically distinct regions often see higher inflation, the UT has also benefited from the broader national disinflationary trend.Across other states, the moderation was even more pronounced. Delhi’s inflation fell to 0.96 per cent, Bihar to 0.01 per cent, Assam to 0.16 per cent and Odisha to 0.12 per cent. Several states, including Telangana at 0.20 per cent and Uttar Pradesh at 0.30 per cent, recorded near-zero inflation, highlighting the depth of the price correction underway. At the other end of the spectrum, Kerala recorded inflation of 8.05 per cent and Lakshadweep 6.69 per cent, making them the only regions to breach the RBI’s upper tolerance threshold.The survey noted that the clustering of inflation outcomes within the tolerance band suggests “increasing synchronisation of inflation across states”. However, a deeper analysis of monthly CPI data from January 2014 to December 2025 showed that differences between states and the national average are not merely temporary. All states exhibited positive persistence in inflation gaps, meaning deviations tend to spill over into subsequent months rather than fade immediately.