Food inflation fell sharply by 2 percentage points to 10.3 per cent for the week ended November 6, from 12.3 per cent in the previous week, raising hopes that overall inflation may decline to around 6 per cent by the end of the year, as predicted by the government.
Food inflation stood at 13.99 per cent in the corresponding period last year. This is the first time in recent post-recession history that food inflation for a particular period was lower than the corresponding period of the last financial year.
The decline may prompt Reserve Bank of India to halt its monetary tightening drive to boost industrial growth, which had fallen to a 16-month low of 4.4 per cent in September.
The price of most food items declined during the week on improved availability after the end of the monsoon. Even onions, which have become quite expensive due to extensive crop damage in Maharashtra, rose just 0.63 per cent during the week under review.
On a yearly basis, however, the price of protein-based food items became significantly costlier. While the price of eggs, meat and fish rose over 33 per cent, milk prices jumped more than 25 per cent and pulses shot up 19.4 per cent.
Furthermore, wheat prices rose over 11 per cent.
Besides food items, minerals became over 27 per cent costlier on a yearly basis for the week ended November 6.
Earlier this year, Prime Minister Manmohan Singh had exuded confidence that overall inflation will come down to 6 per cent by the end of this year.