"There is movement downward," said Commerce and Industry Minister Kamal Nath even as Prime Minister Manmohan Singh took a review of price and availability of food commodities at a meeting of Cabinet Committee on Prices (CCP).
However, the Reserve Bank of India (RBI) did not show any complacency on the price front and indicated that it would continue with required monetary policy to bring down inflation to 7 percent by the end of current fiscal.
The ease in inflation is being attributed to the fall in prices of primary articles, fruits and vegetables. While the slight increase in the cost of manufacturing goods remained a matter of concern for the government, the significant decline in fuel and power index came as a big pop up.
Inflation has almost tripled this year to reach its highest mark of 12.4 percent amid higher fuel and food prices, forcing the central bank to raise interest rates three times since June and making it harder for consumers to purchase cars, motorcycles and homes. Economic growth is still almost double the average pace since India's independence in 1947.
According to an estimate released by the World Bank, India may lose its position as the world's fastest-growing major economy after China this year, whereas Russia's economy may grow 7.1 percent in 2008, while China may increase 9.4 percent this year, the bank forecast in June.
Last week, first-quarter economic growth slowed to 7.9 percent, the weakest in three-and-a-half years, as successive interest rate hikes hit demand.
The growth figure for the three months to June was far below the 9.2 percent expansion recorded in the same quarter a year earlier.
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