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The base effect refers to the impact of the rise in price level (i.e. last year’s inflation) in the previous year over the corresponding rise in price levels in the current year (i.e., current inflation)
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If the price index had risen at a high rate in the corresponding period of the previous year leading to a high inflation rate, some of the potential rise is already factored in, therefore a similar absolute increase in the Price index in the current year will lead to a relatively lower inflation rates. Ex. If inflation in June 2016 was 8% and absolute increase in Price index in June 2017 was say 9%, then, inflation in June 2017 will be low i.e. 1%
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On the other hand, if the inflation rate was too low in the corresponding period of the previous year, even a relatively smaller rise in the Price Index will arithmetically give a high rate of current inflation. Ex. If inflation in June 2016 was 1% and absolute increase in Price index in June 2017 was say 4%, then, inflation in June 2017 will be low i.e. 3%