Inflation based on wholesale prices eased to a six-month low of 2.84 per cent in January on cheaper food articles even as vegetable prices continued to rule high.
Calculated on the basis of Wholesale Price Index (WPI), the inflation was 3.58 per cent in December 2017 and 4.26 per cent in January 2017.
WPI inflation at 2.84 per cent in January is the lowest in six months. The previous low level was recorded in July at 1.88 per cent.
According to the government data released on Thursday, inflation on food articles slowed to 3 per cent in January, from 4.72 per cent in December 2017.
Inflation in vegetables witnessed some softening with annual inflation at 40.77 per cent in January as against 56.46 per cent in the previous month. Kitchen staple onion witnessed a whopping 193.89 per cent price rise in January.
Pulses witnessed deflation at 30.43 per cent, and the same for wheat and cereals was 6.94 per cent and 1.98 per cent respectively.
Prices of protein rich items eggs, meat and fish cooled by 0.37 per cent while that of fruits rose 8.49 per cent in January.
In the fuel and power segment, wholesale inflation rose to 4.08 per cent in January, while it was 2.78 per cent for manufactured items.
Data released earlier this week showed that retail inflation was at 5.07 per cent. The Reserve Bank takes into account retail inflation while deciding on key policy rates.
In its policy review last week, the RBI had kept key interest rate unchanged and estimated retail inflation to be 5.1 pc in the January-March quarter. For April-September, RBI projected inflation to be in the range of 5.1-5.6 per cent.
Meanwhile, inflation for November has been revised upwards to 4.02 per cent from the provisional estimate of 3.93 per cent released earlier.