India's food inflation rate fell steeply to 0.42% during the week ended December 17 compared to last year, continuing the decline over the last nine weeks from 11.43% in mid-October. Fresh arrival of seasonal vegetables bolstered supplies and pushed down prices.
Onion prices crashed by nearly 60% during the week compared to last year when the vegetable's price had skyrocketed to record levels as speculative hoarding and unseasonal rains damaged crops.
"If this trend continues then you will have (fiscal) year-end (headline) inflation around 6%... But it can not be lower than 6% because inflationary pressure was higher in weeks before," said finance minister Pranab Mukherjee.