The annual Wholesale Price Index based inflation rate declined for 7th straight week to -1.54 per cent; as compared to -1.17 per cent in the previous week. However, there is no respite for common man as food inflation is still considerably high, making it difficult for the middle class as well as the poor to make both ends meet.

Food inflation stood at 1.2% due to costly prices of pulses, fruits and vegetables. Mutton, gram and aherhar prices rose 14 per cent, 4 per cent and 9 per cent respectively in the reporting quarter. Prices of sugar and gur too increased 1 per cent.

Mineral group reported a significant decline of -16.8 per cent; with iron prices declining 24 per cent, while manganese ore and vermiculite prices increased by 77% and
86%, respectively.

In the meantime, the Reserve bank of India, during its policy review meet, hoped that inflation would soon come out of the negative territory. The apex bank maintained existing level of interest rates and revised inflation rate target to 5 per cent from 4 per cent by March 2010.

Kotak Mahindra Bank's Chief Economist, Indranil Pan, said: "Concerns for inflation now come in the form of food items. Manufactured articles index is actually lower for this week. This could indicate that demand-driven inflation could take some time to take hold. Till that moment, RBI could stay on a pause mode."