Inflation rose to 6.95% in February because of a sharp increase in food prices, especially vegetables and protein-based items.
Inflation, as measured by the Wholesale Price Index (WPI), was 6.55% in January. In February last year, it was 9.54%.
As per the official data released on Wednesday, food inflation was 6.07% in February against (-)0.52% in January.
Pulses turned expensive by 7.91% and vegetables by 1.52% during February. Prices of vegetables had declined by 43.13% in January.
Finance minister Pranab Mukherjee on Wednesday said there is inflationary pressure, but expressed the hope that the rate of price rise will come down to 6.5% by March-end.
He said although inflation in the manufactured goods is above 5%, there has been some easing. Manufactured items have a weight of around 65% in the WPI basket.
"I do hope if this trend continues then we will end the year with around 6.5% (inflation)...," Mukherjee told reporters here.