Wholesale inflation eased to 3.57 per cent in September, reversing its seven-month uptrend, as good monsoon helped cool food prices, prompting the industry to demand interest rate cut to boost economic activity.
The wholesale price index-based inflation, reflecting the annual rate of price rise, stood at 3.74 per cent in August. In September 2015, WPI inflation was (-)4.59 per cent.
Yesterday, the official data had showed retail inflation falling to 13-month low of 4.31 per cent in September.
After the release of WPI data, industry chambers gave accolades to the Reserve Bank for the 0.25 percentage point reduction in interest rate last week.
"It can be said that the anti-inflationary supply side measures of the government have been successful and rising inflation has been brought under control. In this context, the RBI governor needs to be congratulated for lowering rates in anticipation of a benign inflationary outlook," CII said.
Wholesale inflation had been on a rise since February this year.
During September, WPI inflation in vegetables witnessed deflationary pressures and was recorded at (-) 10.91 per cent. Inflation in this category had scaled a high of 28.45 per cent in July.
This was aided by inflation for onion, which was at (-)70.52 per cent.
Pulses inflation continued to rule high at 23.99 per cent in September, according to the Commerce Ministry data.
Potato, a daily consumable vegetable, witnessed maximum inflationary pressure at 73.31 per cent. Prices of fruits rose 14.10 per cent during the month.
Overall, the food inflation basket showed good moderation with inflation at 5.75 per cent in September, as against 8.23 per cent in August.
Ficci said good monsoon and government action helped in abating the price level and indication are there that prices will remain benign.
"We do hope that going ahead banks will take a cue and further translate this into lower lending rates which is one of the key factors that can help boost IIP which continues to remain dismal," Ficci said.
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