Consumer Price Index (CPI)-based inflation fell to 4.38 per cent in November from 11.16 per cent in the corresponding period last year, the fourth consecutive monthly fall and the lowest since the government started releasing data in this regard (February 2012).
For October this year, CPI inflation stood at 5.52 per cent.
According to data released by the Ministry of Statistics and Programme Implementation on Friday, food inflation, which accounts for 42.71 per cent of the CPI, stood at 3.14 per cent in November, against 5.59 per cent in October and 15.35 per cent in November last year.
According to preliminary estimates released in September, India's food grain production in the 2014-15 kharif season is expected to stand at about 120 million tonnes (mt), 9.5 mt less than last year, though officials have said there could be a further downward revision in the estimate.
"The November inflation numbers were something the markets and the Reserve Bank of India (RBI) were expecting and that is why the governor held rates in the last monetary policy meeting," Sabnavis added.
Earlier this month, RBI Governor Raghuram Rajan kept key policy rates unchanged, despite intense pressure to cut those. He, however, held out hope for industry by saying the central bank could ease the monetary policy early next year, even outside the policy review cycle, if the downward momentum in inflation continued and fiscal developments were encouraging.
"We have had a couple of months (of low inflation) after five years of high inflation. We want to make sure this is for real, especially because we don't intend to flip-flop," he had said.
Among sub-groups, the steepest price rise was seen in the case of fruits - 13.74 per cent year-on-year - and milk and milk products, prices of which rose 10.24 per cent. The steepest fall in prices was in the case of vegetables, which contracted 11 per cent.