The consumer price index (CPI) inflation rate for February fell to 4.4%, compared to 5.07% in January 2018, according to the Ministry of Statistics and Programme Implementation.
The CPI rates fell due to a decline in inflation in food and fuel, the Reserve Bank of India (RBI) said in its first bi-monthly Monetary Policy Statement.
Food inflation declined by 120 bps in February, pulled down by a sharp decline in vegetable prices, especially of onions and tomatoes, along with continuing deflation in pulses. The fall in prices was also observed in other food components such as eggs, sugar, meat and fish, oils, spices, cereals and milk, the report said.
Liquefied petroleum gas (LPG) inflation fell in line with the volatile global crude prices.
Transportation inflation rose due to higher fuel prices and transportation fares. Inflation either eased or remained at a low level in February in other major sub-groups such as household goods and services, recreation and amusement, education, and personal care and effects.
Inflation for the first half of 2018 was expected to be lower than the February estimates, despite a likely reversal in food prices, the central bank report said.
The overall food inflation was expected to be under check on the assumption of normal monsoon and effective supply management by the Union government.
Domestic demand in the country was also expected to strengthen during the year.
CPI inflation for the first half of 2018-19 was revised to between 4.7%-5.1%, and to 4.4% in the second half of the fiscal year.