India's wholesale price inflation eased to its lowest levels in nearly five years at 2.38 percent during September compared to 3.74 percent in the previous month, aided by a moderation in food and fuel costs, government data showed Tuesday.
The inflation rate reported at 2.4 percent for September is the lowest since October 2009.
The wholesale price index (WPI) was at 7.05 percent during the corresponding month of the previous year, according to data released by the ministry of commerce and industry here.
Food prices jumped by 3.52 percent year-on-year during the month under review. The food inflation had increased by 14.03 percent in September 2013.
Prices of vegetables plunged by 14.98 percent in September year-on-year. Onion prices decreased by 58.12 percent.
However, potatoes' prices jumped by 90.23 percent. Fruits became costlier by 20.95 percent, while eggs, meat and fish became dearer by 4.12 percent year-on-year during the month under review.
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Cereal prices were up 3.45 percent year-on-year. Rice was costlier by 6.87 percent, but wheat prices fell by 1.50 percent.
Fuel and power inflation rose to 1.33 percent in September as compared to 11.72 percent in the corresponding period of last year.
The prices of liquefied petroleum gas (LPG) grew by 2.83 percent, petrol became cheaper by 9.42 percent. However, diesel was costlier by 10.10 percent.
Manufactured products' inflation rose to 2.84 percent in the month under review from 2.36 percent in September 2013.
The data was released a day after the consumer price index-based inflation results for September were posted at 6.46 percent (provisional), which came down to its lowest levels since 2012 during September from 9.84 percent in the corresponding month of last year.
The retail inflation at 6.5 percent has been the lowest since the beginning of the new series of data which started to be released from 2011.
The retail inflation based on Consumer Price Index (CPI) had slowed down to 7.73 percent in August from 7.96 percent in the previous month.
The latest data assumed significance as the Reserve Bank of India (RBI) had set a target for CPI inflation at eight percent by January 2015 and six percent by January 2016.
Industry lobby Federation of Indian Chambers of Commerce and Industry (FICCI) said that the decline in the CPI and the WPI inflation rates indicated inflationary pressures waning.
"With global commodity prices subdued and exchange rate range bound, the prices are expected to remain moderate. CPI inflation is moving in consonance with RBI's target rate and this should bring in some breathing space," said A. Didar Singh, secretary general, FICCI.
"With these inflation numbers, we hope growth considerations will be brought to forefront and the interest regime softened."
Other industry lobby Confederation of Indian Industry (CII) too welcomed the sharp decline in headline inflation.
"Going forward, the downslide in global commodity prices led by fuel together with improved monsoon conditions and favourable policy interventions should help contain inflation and prevent prices from resuming its inflationary tendency anytime soon," said Chandrajit Banerjee, director general, CII.
"To ensure that the easing of food prices is a sustained phenomenon, CII calls for critical distribution reforms which would bring about logistics efficiency through improvement in supply chain," he said.