Inflation declined to 6.87 per cent in July as the rate of price rise of the food articles category eased a little, although pressure remained on potato, pulses and rice as well as manufactured items.
Inflation, as measured by the Wholesale Price Index was 7.25 per cent in June. It was 7.55 per cent in May. In June 2011, it was 9.51 per cent.
Overall, food inflation declined to 10.06 per cent in July, from 10.81 per cent in June.
In July last year, however, the rate of price rise in this category was 8.19 per cent. Food articles have 14.3 per cent share in the WPI basket.
In the manufactured items category, prices rose for cotton textiles, paper and paper products, cement and lime.
The rate of price rise in the manufactured products was 5.58 per cent in July, as against 5 per cent in June.
In food articles category in July, potatoes turned expensive by 73 per cent, rice by 10.12 per cent, cereals by 8.29 per cent and pulses by 28.26 per cent on annual basis.
Besides, eggs, meat, fish prices were up by 16 per cent.
Inflation rate in milk prices was 8.01 per cent and for vegetables it was 24.11 per cent.
However, the pressure on prices of onions and fruits declined during July. While inflation in fruits was negative at (-)0.15 per cent, for onion it was (-)9.81 per cent.
Among the non-food articles, inflation in fibres was high at 5.89 per cent, oil seeds at 25.22 per cent and minerals at 8.43 per cent.
Reserve Bank Governor D Subbarao had said in July that the inflation numbers on both the wholesale and retail front are way above the central bank's comfort level.
Subbarao said, "We are way above the threshold" and a level of around 5 per cent on the headline inflation is the RBI's threshold.
On July 31, Reserve Bank of India left key interest rates unchanged to fight inflation.
The key lending (repo) rate, at which banks borrow from RBI, has been retained at 8 per cent despite demands from the industry to cut interest rates to spur economic growth.
The Cash Reserve Ratio (CRR) - the amount of deposits banks keep with RBI in cash - has also been retained at 4.75 per cent.
With PTI inputs