Retail inflation, based on Consumer Price Index (CPI), was at 10.36 per cent in May.
"Decline in retail inflation for urban areas in June 2012 as compared to May 2012 is attributed to higher base of the Housing Group index," Minister of State (Independent charge) for Statistics and Programme Implementation Srikant Kumar Jena said.
Provisional annual inflation of June 2012 for rural, urban and combined in respect of 'food and beverages' are 10.41 per cent, 11.52 per cent and 10.71 per cent respectively, he said.
However certain food items like vegetables turned costlier by 27.60 per cent, followed by edible oils (16.58 per cent) and milk products (12.75 per cent) in June on annual basis.
Prices of egg, fish and meat shot up by 11.65 per cent, while pulses became costlier by 9.34 per cent.
The decline in CPI along with wholesale price index (WPI) based inflation has raised some hope of rate cut by the Reserve Bank later this month to promote growth.
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For June, WPI-based inflation dropped to 7.25 per cent from 7.55 per cent with easing prices of manufactured goods.
However experts said CPI numbers are still at elevated levels. They are in double digits which will dissuade RBI from cutting interest rate in policy review on July 31, they said.