The annual rate of Wholesale Price Index (WPI)-based inflation eased to 2.60 per cent in September as prices of food articles, led by vegetables, softened. This was after wholesale inflation had soared to a four-month high of 3.24 per cent in August 2017.
Compared with the same month last year, however, the rate of inflation saw an increase from 1.36 per cent in September 2016.
The government data released on Monday showed that inflation in food articles tapered to 2.04 per cent during the month, against 5.75 per cent in August on an yearly basis. Inflation in vegetable prices cooled to 15.48 per cent in September, against a high of 44.91 per cent the previous month.
Onion prices, however, continued to rule high, with 79.78 per cent increase in September. In the egg, meat and fish segment, the rate of price rise was 5.47 per cent. Inflation in manufactured products witnessed a slight increase to 2.72 per cent, against 2.45 per cent in August.
In the fuel and power segment, inflation cooled to 9.01 per cent, against 9.99 per cent in August. Fuel inflation has remained high in the past two months, as petrol and diesel prices have continued to rule high relentlessly on global crude oil rates, while power rates have shot up on lower domestic production.
Pulses continued to witness deflation, at 24.26 per cent. Similarly, potato saw a deflation at 46.52 per cent and wheat at 1.71 per cent.
The final print of July WPI inflation remained unchanged from the provisional estimate of 1.88 per cent.
Data released earlier this week had shown retail inflation at 3.28 per cent in September, unchanged from August, even as vegetable and cereal prices softened.
Besides, industrial production grew at a nine-month-high rate of 4.3 per cent in August, mainly on account of robust performance of mining and power sectors coupled with higher capital goods output.
Earlier this month, the Reserve Bank of India (RBI) had kept benchmark interest rate unchanged on fears of rising inflation while lowering growth forecast to 6.7 per cent for the current financial year. It also raised its inflation forecast to a range of 4.2 to 4.6 per cent during remainder of current fiscal as against 4 to 4.5 per cent previously.