Food inflation dropped to 7.7% for the week ended April 30, the lowest level in 18 months, due to a fall in the price of pulses and vegetables, especially potatoes.

The rate of price rise in food items, as calculated on the basis of the wholesale price index (WPI), was 8.53% in the previous week and 21.46% in the comparable period of 2010.

The decline in food inflation is seen as a breather for the government, as the rate of price rise has stubbornly remained high despite its fiscal measures and the RBI's monetary tightening steps.

During the week under review, prices of pulses declined by over 9% year-on-year, while vegetables became cheaper by 3.64 per cent.

The data revealed that potato prices were down by 3.58% on an annual basis.

However, inflation in other food articles like cereals and fruits remained high. Cereals became dearer by 4.54 per cent, while fruits prices were up by over 35% on an annual basis.

Milk was also costlier by 4.3% in the week ended April 30 compared to the corresponding seven-day period last year. Eggs, meat and fish were also up by 4.62 per cent.

The data further showed that inflation in non-food primary articles was 28.62% during the week under review.

Fibre prices rose by almost 86% and minerals by 11.95 per cent.

Early this month, the RBI had increased borrowing rates by 50 basis points to curb demand and control inflation. The food segment contributes almost 15% in the WPI.

Headline or overall inflation stood at 8.98% in March, which is above the government's comfort zone.

In the monetary policy, the RBI said that overall inflation is likely remain in the range of 9% during the first half of fiscal 2011-12, but is expected moderate to around 6% by the year end.

DNA